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Iron-Carbon diagram
The diagram of phase Fe-C is "the" basic diagram. It is difficult to apprehend the work of steel without being informed of this diagram. This diagram known as binary is rather simple. It is different for the ternary diagrams as soon as one adds an additional chemical element with Iron and carbon.
A large thank you to the "Doc" for its explanations! The famous diagram
Use and limitations
First of all, it is absolutely necessary to be conscious of the limitations of this diagram:
> It has sense only for the stable or metastable states. Fast heatings and the quick cooling (hardening) are not modelled by this diagram. Quite simply, this diagram does not integrate the "time" factor. To integrate the temporal factor, other diagrams are necessary!
> It is valid only for nonallied steels. The presence of alloy elements can modify this diagram considerably!
> During the variations in temperature, a hysteresis appears, i.e. that the passage of a state A to a state B will be done at a temperature different from the passage from the state B to the state A. One will distinguish these two temperatures with the suffix "C" for the heating (= Chaffage in French) and "R" for cooling (=Refroidissement in French), (e.g Ac1 and Ar1). The difference between these two temperatures is reduced if the variations in temperature are slow.
Types of steel
On the diagram, you can distinguish three zones:
> Eutectoid steels are composed of Iron and 0.77% of Carbon. At low temperature, their structure is only of the Pearlite.
> Hypoeutectoid steels have a Carbon rate lower than 0.77%. Note however that only steels whose percentage of carbon exceeds 0.35% can be hardened. In cutlery, you will seldom go down below 0.5%. At low temperature, their structure is a mixture of ferrite and Pearlite. Less steel contains carbon and more important is the proportion of ferrite.
> Hypereutectoid steels have a Carbon rate higher than 0.77%, with a limit of 2% (beyond that, it is cast iron). In cutlery, you will seldom go beyond 1.6% of percentage of carbon. At low temperature, their structure is a mixture of Cementite and Pearlite. More steel contains carbon and more important is the proportion of Cementite. The Cementite in excess (i.e. > 0.77%) will be located in the grain boundaries.

In synthesis:
Type of steel
Hypoeutectoid
Eutectoid
Hypereutectoid
%C
<0.77
0.77
> 0.77 and <2
Cold structure (Annealed)
Ferrite + Pearlite
Pearlite
Pearlite + Cementite
Action of the rises in temperature
> the structure of steels eutectoids change very quickly when the temperature passes beyond 720°C. The pearlite is transformed into austenite. This passage corresponds to the point C of the diagram.

> For hypoeutectoid steels, it is a little more complex! Just beyond 720°C (line AC, blue on the diagram), Pearlite becomes Austenite. On the other hand, Ferrite remains in its state. If the temperature continues to increase, Austenite can exist with less than 0.77% of dissolved Carbon! There is thus available carbon to combine with a little Ferrite to create additional Austenite. This phenomenon is accentuated with the increase of temperature. Beyond temperature AC3 (line B-C, red on the diagram), all Ferrite is transformed into Austenite.

> For hypereutectoid steels other things happen, but it is always complex! Beyond 720°C (line EC, purple on the diagram), all the Pearlite is transformed into Austenite. This represents a strong percentage of steel (in general > 90%). The surplus remains in the form of Cementite (i.e. carbides of iron). If the temperature continues to increase, Austenite is able to dissolve more Carbon! A part of Cementite is then transformed into Austenite. This phenomenon is accentuated with the rise of temperature. Beyond a temperature ACm (line CF, orange on the diagram), all the carbides are dissolved.
Particular zones and points
Zone green (O, A, B): This particular zone does not have importance in cutlery, because of its small percentage of carbone (i.e. 0.02%).
Mark B: It corresponds to the temperature of austenitization in pure iron for instance 910°C.
Mark C: It corresponds to the austenitization of an eutectoid steel (720°C).
Mark F: It corresponds to the total dissolution of carbides for a steel with 2% carbon for instance 1130°C.