Fun fact: Japan is pretty proud of their traditional iron-sand iron. Which actually either is pretty crappy quality or not traditional at all.
- Without magnetic separation there are too many impurities in it. The classical/traditional method is pretty good, but only as far as late medieval methods go. That's pre pre-industrial.
- Even after the magnetic separation, sulphur from sulfur compounds need to be burned off in an oxygen rich but low-ish temperature (you don't want anything melt at this stage, as that would encapsule impurities).
- The traditional method doesn't include this step.
- After that you would want to melt it in a carbon rich environment which would reduce iron oxides, and make the steel carbon rich. And further separates the iron from still present silicates. For that, though, are temperatures needed that melt the iron to point of being as viscous as water. And hold it there for a while.
- The traditional method fails here again as it doesn't get hot enough to fully melt the iron. Even the modernized traditional method that uses electric blowers, instead of manual operated ones, fails to reach these temperatures. It melts, but not enough for the separations to occur. The former method (manual air pumps) barely melts it.
All that leads to a high-ish impurity iron. The further processing then tries to hammer out the impurities with meager success.
Again: it's pretty good for late medieval times, but doesn't hold a candle to modern spring steel.
I don't like that fact, either, that a sword made with the heart and soul of a traditional Japanese blacksmith, even with modernized methods, loses against one industrial stamped from rolls of sheet metal.