HOEGANAES, ELECTRALLOY JOIN FORCES

TO PRODUCE STAINLESS STEEL POWDERS

Electralloy’s Advanced Melting Technology

Provides Greater Chemical Consistency,

Improves Powder Properties

CINNAMINSON, N.J. – A manufacturing/technology partnership of two leading metal producers that will enhance the quality of stainless steel powders along with increasing supply reliability was announced today by Hoeganaes Corporation and Electralloy, a G. O. Carlson, Inc. Company located in Oil City, Pa.

     Hoeganaes’ new multimillion dollar stainless steel water atomization facility at Electralloy’s plant is online and brings together the advanced melting technology of Electralloy and Hoeganaes’ extensive experience in atomizing and powder processing. Electralloy’s melt facility includes an electric arc furnace and Argon Oxygen Decarburization (AOD) processing. The AOD process provides greater chemical consistency and capability than currently existing induction melting processes.

     "This unique relationship focuses on the growing demand for stainless steel powders, especially in the automotive industry. We investigated several options for high volume manufacturing of these powders and this production partnership with Electralloy by far emerged as the most beneficial for us and, more important, our customers," said Patrick J. McGeehan, vice president, Technology at Hoeganaes.

     Under the agreement, Electralloy provides electric arc furnace-melted and AOD-refined liquid metal for atomization and secondary processing (screening and blending) by Hoeganaes.

     Electralloy’s innovative melting technology provides several advantages. The new process, with a nominal melt size of 20 tons, provides enough melt capacity to meet the requirements for all current stainless steel applications in North America and is capable of producing enough stainless steel powder to match the most optimistic growth predictions.

     In addition, the new process provides several improvements in powder properties, especially in green strength, with values more comparable to traditional iron powder grades. This will allow fabricators to increase the yield and complexity of P/M stainless steel parts.

     "Electralloy is enthused with the opportunity to couple its ability to custom melt difficult alloys with Hoeganaes’ leading edge powder technology," said Tracy Rudolph, president of Electralloy. "The synergy of these two fine organizations should enhance Hoeganaes’ product offerings to the P/M marketplace."

     "This unique partnership represents a perfect fit with our strategic direction of building on our corporate strengths of being the premier custom producer of specialty steel products. We are proud to be associated with Hoeganaes in this venture," said H.L. Kephart, president, chief executive officer at G.O. Carlson Thorndale, Pa.

     Hoeganaes Corporation is the world's leading producer of ferrous metal powders and serves the global P/M marketplace. For more information, contact Hoeganaes Corporation at 1001 Taylors Lane, Cinnaminson, N. J. 08077-2017 856-829-2220

Internet: www.hoeganaes.com

e-mail: thale@hoegcorp.com

     Electralloy is the premier producer of specialty alloy ingot, pigs, large diameter bar and large RCS or Round Billet. It also services the industry as a custom melter of proprietary alloys and has recently added ESR and VAR capabilities. For more information call 800-458-7273