History

According to tradition, swords originally found inwere forged by foreign travelers such as the Chinese. However, Japanese sword smiths are credited with the refinement of a process that incorporates unique usage of steel compounds and forging techniques to produce the characteristic design of traditional Japanese swords.

Interestingly it is because of the lack of iron ore (or the lower quality of the ore) that Japanese sword smiths developed a technique to remove imperfections contained in the raw steel they used for their swords. Initially blades were constructed from only one type of steel (non-laminated, or maru) but eventually smiths used multiple variations of steel to alienate as many useful properties for the sword as possible. For instance, soft steel was used for the main portion of the blade to provide for flexibility; hard steel for the cutting edge, and medium steel for the sides and top of the blade. The primary type of steel used traditionally was tamahagane, produced by combining lower quality local iron ore with carbon in a specific smelting process.

Modern Swords

In general there are three types of steel that most Japanese swords smiths use today: 420 J2 Stainless Steel, High Carbon Steel, and Folded (Tamahagane) Steel. Please note that folded steel does not actually refer to the elements of the steel, but how it is forged. Stainless steel blades are typically manufactured to be owned as show pieces rather than to be used in battle. High Carbon Steel blades can be used in the dojo due to their strength, although folded steel blades would be more desirable for fighting because of their maximum power and flexibility. 

The folding process increases strength and flexibility as the sword smith will work to repeatedly hammer out any impurities from the steel with each repeated fold. That said, older steel (or Tamahagane steel with a carbon content of 1% to 1.5% versus 0.1% to 0.3% of average knife steel) tends to be richer in oxygen than newer steel (or steel with a lower carbon content). This property means that oxidized portions of the metal are extremely soft and pliable so they can be easily stretched and through repeated smelting become finely dispersed and almost unsusceptible to damage. Repeated smelting, folding, and hammering by the smith also produces the intricate blade patterns unique to Japanese swords and also allows for a high sheen when polished.

Stainless Steel

As mentioned above, although beautiful, stainless steel swords are not meant for dojo fighting due to the fact that their molecular structure is simply not as hard or solid as higher levels of steel. This fact does not change depending on where said stainless steel comes from—stainless steel is always stainless steel in terms of chemical makeup. Meaning, it is high in chromium (to enhance the grain and polish) which weakens the internal structure of the blade compared to high carbon steel.

High Carbon Steel

Blades made with high carbon steel are stronger in nature than stainless steel due to their chemical makeup. Sometimes 5160 steel is used in the making of Japanese swords (a compound similar to what is found in truck springs, hence the term, "e;spring steel"e; that is sometimes used), or higher end katanas may be forged from welded cable steel, or from the AISI 10xx series (1050, 1084, 1095). Whatever the case, the steel must be clay tempered to create an authentic hamon (temper line) which cannot be formed using high alloy steels (such as stainless steel).

Tamahagane

As mentioned above, Tamahagane steel's high carbon content and forging process make it very desirable for modern sword collectors as it represents a dedication to traditional Japanese smithing methods. Its strength and durability are legendary. Although some modern steels are beginning to gain popularity (such as L6) it is still amazing to note that smiths using a poor quality ore designed a process that created some of the strongest Japanese swords still in existence today.  

Conclusion

When purchasing a sword, be aware that the chemical makeup and how the blade was forged will determine its strength and durability. Depending on your budget and reasons for purchasing, make sure to inquire about these issues to ensure you get the sword you desire.