If you have not visited the blacksmith since you reached level 16, then he will have new stuff.
The content of a merchant's inventory, mineral veins, unlocked chests, etc are set when you get close enough and run the crosshairs over them. If you save before doing so you can reload repeatedly to try to get something good (with a merchant, their inventory will be reset the next time you level). I wouldn't waste too much time reloading, though, unless (as in this case) you really need to upgrade something, or are at a chest (or quest reward, boss type opponent, etc) that always gives something decent quality (and you want to make sure you get something that suits your character) or at a malachite vein to make sure you get some gems (1 or 2 are relatively easy to get, 3 can be gotten with a bit of patience or luck, and 4 are possible but quite rare).
There is a blacksmith at the top of Lovis' tower, as well (if you didn't get him thinking too existentially). Derk the enchanter may be worth checking, as well as various merchants in the starting town (several in the Black Boar, etc). There is a merchant in the shipwreck camp on the island (at least in D2:ED the hermit at the start didn't have much to trade).
