"sweating" steel

I was talking to a smith the other day. He said when he uses a high-grade steel ( higher than SK3 or SK(D?)11 ), the specific nature,
source and name of which he refuses to divulge, the finished, highly polished product of a bar that has been beaten very many times leaks a liquid that he has to wipe off every week or so. The "liquid" looked to me oil or graphite. He said he doesn't know what it is or why it keeps coming out of the steel. This seemed to ring a bell with me, but I couldn't find any-thing on the Internet. Does any-one have any ideas?
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