UNITED STATES
                          SECURITIES AND EXCHANGE COMMISSION
                                WASHINGTON, D.C. 20549

                                      FORM 10-Q

            (Mark  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
            One)               SECURITIES EXCHANGE ACT OF 1934
             [X]

              For the quarterly period ended       September 30, 1996

                                          OR


             [ ]     TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF
                             THE SECURITIES EXCHANGE ACT OF 1934

               Commission file number                1-7276

                                  EXOLON-ESK COMPANY
                               _______________________

                (Exact name of registrant as specified in its charter)

                    Delaware                           16-0427000
                  ___________                     ___________________

                (State or other                     (I.R.S. Employer
                jurisdiction of                   Identification No.)
                incorporation or
                 organization)


                       1000 East Niagara Street, Tonawanda,
                                   New York 14150
                       ____________________________________
                     (Address of Principal Executive Offices)
                                    (Zip Code)


                                  (716) 693-4550
                             ________________________
                     (Registrant's telephone number, including
                                    area code)




           (Former name, former address and former fiscal year, if changed
                                  since last report)


           Indicate by check mark whether the registrant (1) has filed all
           reports required to be filed by Section 13 or 15(d) of the
           Securities Exchange Act of 1934 during the preceding 12 months
           (or for such shorter period that the registrant was required to
           file such reports), and (2) has been subject to such filing
           requirements for the past 90 days.  YES..X..   NO.....

           As of November 11, 1996, the registrant had outstanding 481,995
           shares of $1 par value Common Stock and 512,897 shares of $1
           par value Class A Common Stock.



                          PART I - FINANCIAL INFORMATION
                          Item 1.  Financial Statements
                                Exolon-ESK Company
                       Condensed Consolidated Balance Sheet
                       (in thousands except share amounts)

                                                 (Unaudited)
        ASSETS                                      September    December 
                                                     30, 1996     31, 1995
                                                   __________   __________
        Current assets:

             Cash                                         $93         $440
             Accounts receivable (less allowance for 
                doubtful accounts of
                $490 in 1996 and $419 in 1995)          9,921        8,896
             Inventories                               17,636       19,700
             Prepaid expenses                             696          359
                                                      _______       ______
             Total Current Assets                      28,346       29,395
        Investment in Norwegian joint venture           5,637        5,230
        Property, plant and equipment, at cost         58,696       55,903
        Accumulated depreciation                     (42,206)     (40,710)
                                                     ________      _______

             Net property, plant and equipment         16,490       15,193
        Other assets                                      440          397
                                                      _______       ______
        Total Assets                                  $50,913      $50,215
                                                      _______      _______
        LIABILITIES AND STOCKHOLDERS' EQUITY

        Current liabilities:
             Notes payable                             $2,000            -
             Current maturities of long-term debt       1,550        1,550
             Accounts payable                           3,051        3,229
             Accrued expenses                           1,480        1,713
             Income taxes payable                       1,623        1,329
                                                      _______      _______
             Deferred income taxes                          -          160
                  Total Current Liabilities             9,703        7,981

        Deferred income taxes                           1,300        1,300
        Long-term debt excluding current               10,350       15,350
           installments
        Other long-term liabilities                     3,185        3,286
        Stockholder' equity:
        Preferred stock
                  Series A - 19,364 shares                276          276
                   issued
                  Series B - 19,364 shares                166          166
                   issued
             Common stock of $1 par value                 513          513
              Authorized 600,000 shares, 
              481,995 issued
             Class A common stock of $1 par               513          513
              value - Authorized 600,000 shares, 
              512,897 issued
             Additional paid-in capital                 4,345        4,345
             Retained earnings                         21,028       16,952
             Cumulative translation adjustment           (99)         (99)
             Treasury stock, at cost                    (368)        (368)
                                                      _______      _______
                  Total Stockholders' Equity           26,374       22,298
                                                      _______      _______

        Total Liabilities and Stockholders'
         Equity                                       $50,913      $50,215
                                                      _______      _______

         The accompanying notes are an integral part of these statements.


                              Exolon-ESK Company
                  Condensed Statements of Consolidated Income
                                   Unaudited
                    (in thousands except per share amounts)


                                           Three Months     Nine Months
                                              Ended            Ended 
                                          September 30,    September 30,
                                            1996   1995     1996    1995
                                          _______ _______ _______ _______
        Net sales                         $18,903 $17,094 $58,488 $51,402
        Cost of goods sold                 14,629  13,042  44,975  39,650
                                           ______ _______  ______ _______
        Gross Profit Before                 4,274   4,052  13,513  11,752
           Depreciation                    ______ _______  ______ _______
        Depreciation                          690     762   2,236   2,286
        Selling, general & administrative
           expenses                         1,326   1,221   4,071   3,784

        Research and development                8       -      13      22
                                           ______  ______  ______  ______
                                            2,024   1,983   6,319   6,092
                                           ______  ______  ______  ______
             Operating Income               2,250   2,069   7,194   5,660

        Other Expenses (Income):
             Equity in (Earnings) before 
               income taxes of Norwegian 
               Jt. venture                   (25)   (260)   (407)   (771)
             Interest expense                 284     381     989   1,090
             Miscellaneous expense        
              (income)                        186    (32)   (248)     159
                                           ______  ______  ______  ______
                                              445      89     335     478
                                           ______  ______  ______  ______

             Earnings before income taxes 
              and cumulative effect of      
              accounting change             1,806   1,980   6,859   5,182
        Income tax expense                    732     805   2,772   2,055
                                           ______  ______  ______  ______
             Earnings before cumulative   
             effect of accounting change    1,074   1,175   4,087   3,127
        Cumulative effect of accounting change
          (net of income tax benefit)           -       -       -   (762)
                                           ______  ______  ______  ______
              Net Earnings                 $1,074  $1,175  $4,087  $2,365
                                           ______  ______  ______  ______
        PER COMMON SHARE:
              Earnings before cumulative  
               effect of accounting change  $1.10   $1.21   $4.21   $3.21
              Cumulative effect of        
               accounting change                -       -       -  (0.79)
                                           ______  ______  ______  ______
              Net Earnings                  $1.10   $1.21   $4.21   $2.42
                                           ______  ______  ______  ______
        PER CLASS A COMMON SHARE:
              Earnings before cumulative 
               effect of accounting change  $1.04   $1.14   $3.95   $3.02
              Cumulative effect of        
               accounting change                -       -       -  (0.74)
                                           ______  ______  ______  ______

              Net Earnings                  $1.04   $1.14   $3.95   $2.28
                                           ______  ______  ______  ______

             The accompanying notes are an integral part of these
                                  statements.


                                  Exolon-ESK Company
                   Condensed Statements of Consolidated Cash Flows
                                      Unaudited
                                    (in thousands)
                                                           Nine Months
                                                              Ended
                                                           September 30,
                                                           1996    1995
                                                          _____   _____
              Cash Flow from Operating Activities:

                Net earnings                            $ 4,087 $ 2,365
                 Adjustments to reconcile net income  
                 to net cash provided by operating   
                 activities:
                    Depreciation                          2,236   2,286
                    Cumulative effect of change in     
                     accounting for post-retirement       
                     benefits                                 -     762        
                    Equity in (earnings) of Norwegian  
                     joint venture                        (407)   (771)
                    (Gain) on fixed asset disposals         184      37
                    Deferred income taxes                 (159)   (417)
                    Change in Assets and Liabilities:
                    (Increase) decrease in:
                        Accounts receivable             (1,025) (2,664)
                        Inventories                       2,064 (2,225)
                        Prepaid expenses                  (337)      38
                        Other assets                       (43)    (43)
                     (Decrease) Increase in:
                        Accounts payable                  (178)     886
                        Accrued expenses                  (234)     134
                        Income taxes payable                294   1,439
                        Other long-term liabilities       (101)     404
                                                         ______  ______
              Net Cash Provided (Used) by Operating
                Activities                                6,381   2,232
              Cash Flow from Investing Activities:
                  Additions to property, plant and     
                   equipment                            (3,718) (2,148)
                  Proceeds from fixed asset disposals         -       -
                                                         ______  ______

              Net Cash (Used) for Investing Activities  (3,718) (2,148)
              Cash Flow from Financing Activities:
                  Borrowings (repayments) on long-term      
                  construction financing loans and 
                  revolving credit agreement            (3,000)   (425)
                  Dividends paid                           (11)    (33)
                                                         ______  ______
              Net Cash Provided (Used) by Financing  
               Activities                               (3,011)   (458)
              Net (decrease) in cash                      (347)   (374)
              Cash at beginning of period                   440     467
                                                         ______  ______
              Cash at end of period                        $ 93    $ 93
                                                         ______  ______


                 The accompanying notes are an integral part of these
                                     statements.


                                  EXOLON-ESK COMPANY
                 NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
                                     (Unaudited)


          NOTE 1    The  financial  information is  prepared  in conformity
                    with generally accepted accounting principles and  such
                    principles are applied on a basis consistent with those
                    reflected  in  the  1995  Form   10-K  filed  with  the
                    Securities and  Exchange  Commission.    The  financial
                    information  included  herein,  has  been  prepared  by
                    management  without  audit  by   independent  certified
                    public accountants.  The information furnished includes
                    all adjustments and accruals consisting  only of normal
                    recurring  accrual  adjustments,  which   are,  in  the
                    opinion   of   management,   necessary   for   a   fair
                    presentation of  results for  the interim  period ended
                    September 30, 1996.

          NOTE 2    Through  a  wholly-owned non-operating  subsidiary, the
                    Company's 50% interest  in the Norwegian joint  venture
                    is  recorded  on  the   equity  method  for   financial
                    reporting purposes.   The Company's proportionate share
                    of the  venture's net  sales and  income before  income
                    taxes  together with  the  subsidiary's net  income (in
                    thousands) are as follows:

         
                                              Three Months    Nine Months
                                                  Ended          Ended
                                              September 30   September 30

                     Joint Venture:             1996   1995    1996    1995
                                              ______  ______  ______  ______

                          Net Sales           $2,336  $1,855  $6,094  $5,725
                          Income Before         
                            Income Taxes          25     260     407     771
                          Net Income              15     187     290     555


          NOTE 3    The following are the  major classes of inventories (in
                    thousands) as of September  30, 1996 and  December  31,
                    1995 :
                                                                    
                                               September 30,
                                                        1996  December 31,
                                                 (Unaudited)          1995
                                                 ___________  ____________
                     Raw Materials                    $2,324        $2,119

                     Semi-Finished and                16,610        18,640
                     Finished Goods

                     Supplies and Other                1,034         1,011
                                                      ______        ______

                                                      19,968        21,770
                     Less:  LIFO Reserve             (2,332)       (2,070)
                                                      ______        ______

                                                     $17,636       $19,700
                                                      ______        ______


          NOTE 4    On October  1, 1996  the Company  extended it s  Credit
                    Agreement dated  December 22,  1992 with  a U.S.  bank.
                    This  agreement   provides   for   borrowings   up   to
                    $10,000,000   under  the   revolving  portion   of  the
                    agreement, a $4,000,000 5 year term loan  originated in
                    December  1992 remains  in effect through  January 1998
                    and the  $2,000,000 demand  line of  credit remains  in
                    effect  until December  31, 1996.    Additionally, this
                    agreement provides  for a letter  of credit  to support
                    bonds totaling  $13,000,000 to be  issued by  the Upper
                    Illinois  River  Valley Development  Authority.   These
                    bonds are expected  to be issued prior  to December 31,
                    1996.

                    At  September 30,  1996  borrowings of  $2,700,000 were
                    outstanding under the revolving  portion, borrowings of
                    $1,200,000 were outstanding under the term loan portion
                    and borrowings of $2,000,000 were outstanding under the
                    demand  line of  credit  portion  of  the  U.S.  Credit
                    Agreement.

                    The  Company's  Canadian  subsidiary  has a  $1,000,000
                    (Canadian  funds) operating  demand  loan available  as
                    part  of a credit facility provided by a Canadian bank.
                    Borrowings  outstanding  at  June  30,   1996  were  $0
                    (Canadian funds).

                    The  Company is liable for making payments with respect
                    to $8,000,000 of Industrial Revenue Bonds issued by the
                    Village  of  Hennepin,  Illinois and  purchased  by  an
                    insurance  company  upon refinancing  of  the bonds  on
                    January 22, 1993.  The bonds mature on January 1, 2018.



                                                    September
                    Long Term Debt (in               30, 1996   December
                    thousands) Consists of:        (Unaudited)  31, 1995
                                                    __________  ________

                    Revolving Credit Agreement
                    with a U.S. bank.  Interest
                    at prime rate plus 1/4% or         $4,700    $ 7,100
                    LIBOR plus 2-1/2 % (8.5% at
                    September 30, 1996).

                    Term Loan Agreement with a
                    U.S. Bank.  Interest at
                    prime rate plus 1/2% or LIBOR       1,200      1,800
                    plus 2-3/4% (8.75% at June 30,
                    1996)

                    Industrial Revenue Bond held
                    by an insurance company. 
                    Interest at a fixed rate of         8,000      8,000
                    8-7/8%.  Bond maturity is          ______     ______
                    January 15, 2018.
                                                     $ 13,900   $ 16,900
                    
                    Less Current Maturities             3,550      1,550
                                                       ______     ______

                                                      $10,350    $15,350

          NOTE 5    The  Company  provides  certain  health  care  and life
                    insurance  benefits to  eligible retired  employees and
                    their spouses.  Participants  generally become eligible
                    for  these benefits  after  achieving  certain age  and
                    years  of service  requirements.   These  benefits  are
                    subject to deductibles, co-payment provisions and other
                    limitations.   The Company reserves the right to amend,
                    change, or terminate the benefits at any time.

                    Effective  January 1, 1993, the Company adopted for its
                    U.S. operations only, Statement of Financial Accounting
                    Standards   No.   106,   "Employers'   Accounting   for
                    Postretirement  Benefits  Other Than  Pensions,"  which
                    requires  that  the  estimated cost  of  postretirement
                    benefits  be accrued over the  period earned.  Prior to
                    1993,  the   Company  recognized  the  costs  of  these
                    benefits on  the  pay-as-you-go basis.   The  Company's
                    current policy  is to fund these benefits  on a pay-as-
                    you-go basis.

                    The Company's Canadian subsidiary also provides certain
                    health  care  and life  insurance benefits  to eligible
                    retired  employees  and  their spouses.    Participants
                    generally  become  eligible  for  these benefits  after
                    achieving   certain   age   and   years   of    service
                    requirements.    The  Company  adopted  SFAS  No.   106
                    effective January  1, 1995 for its  Canadian subsidiary
                    and  recognized the  initial obligation as  a one-time,
                    after-tax  charge to earnings  of $502,000 in  the year
                    ended  December 31, 1995.  The Company's current policy
                    is to fund these benefits on a pay-as-you-go basis.

          NOTE 6    Commitments

                    Royalty Agreements

                    The Company has a royalty agreement covering production
                    of crude aluminum  oxide at its Thorold,  Ontario plant
                    using  process  technology  acquired  as  part  of  the
                    construction and  completion of a   furnace  plant.   A
                    separate  royalty agreement  covers  the production  of
                    certain specialty products for  the refractory markets.
                    The agreements  are for a  period of 10 years  each and
                    expire  July  31,  1996 (expired)  and  April  30, 2001
                    respectively.   The  royalty expense  in  U.S.  dollars
                    amounted to $463,000 in  the first nine months of  1996
                    and $483,000 in the same period of 1995.

          NOTE 7    Contingencies

               a.   Environmental Issues

                    (i) Hennepin, Illinois Plant

                    On October  6, 1994, the Company entered into a Consent
                    Order (the  Consent Order )  with the Illinois Attorney
                    General  and  the   Illinois  Environmental  Protection
                    Agency ( IEPA )  in complete settlement of  a complaint
                    brought  by them  which alleged  that  the Company  had
                    violated  certain  air  quality   requirements  in  the
                    operating permit for its Hennepin, Illinois plant.  The
                    Consent  Order provides a  schedule for the  Company to
                    install  a   Continuous  Emissions   Monitoring  System
                    ( CEMS ) and  to implement the  required Best Available
                    Control Technology ( BACT ) for air emissions, pursuant
                    to  an IEPA approved construction and operating permit.
                    The Company obtained final approval  for a construction
                    permit to  implement the  BACT on June  11, 1996.   The
                    Company purchased a  20 acre parcel of land adjacent to
                    its property and construction has commenced.

                    Under the terms  of the Consent  Order the Company  has
                    also  agreed  to  pay a  civil  penalty  of $1,300,000,
                    payable in installments of $260,000 each on November 1,
                    1994, April 1, 1995, February 1,  1996, January 1, 1997
                    and November 1, 1997.  The Company recorded an  expense
                    of  $1,300,000 in  the year  ended  December 31,  1994,
                    which represents the civil penalty.

                    In order to comply with the June 30, 1996 Consent Order
                    and complete facility improvements, the Company expects
                    to   incur  capital   costs  within   the   range  from
                    $13,100,000  to $14,000,000   over the next  two years.
                    As  of September  30, 1996,  the  Company has  incurred
                    approximately $2,302,000  of capital  costs related  to
                    the facility improvements.   The Company is  seeking to
                    finance  the costs of the required capital improvements
                    through an  underwritten credit enhanced  bond offering
                    on a tax-exempt basis through the State  of Illinois to
                    the extent permitted by law and a taxable basis for the
                    remaining  portion.     The  Company  has   obtained  a
                    modification of  its Industrial Revenue  Bond Agreement
                    to allow  for the  required capital  expenditures under
                    the Consent  Order.  A  commitment letter  with a  U.S.
                    bank was executed  October 1, 1996 for this  project to
                    finance long  term taxable and tax-exempt bonds through
                    the Upper  Illinois River Valley  Development Authority
                    in   an  aggregate   principal  amount   not  exceeding
                    $13,000,000 dollars which expires December 31, 1996.


                    (ii) Norwegian Joint Venture

                    The Government of Norway held discussions  with certain
                    Norwegian  industries including  the abrasive  industry
                    concerning  the   implementation  of   reduced  gaseous
                    emission  standards.   The Company's  joint venture  is
                    participating  in these discussions to help achieve the
                    Norwegian Government's  objectives as well  as assuring
                    long term economic viability for the joint venture.

                    The Company's  joint venture appointed a  project group
                    to  complete a study  and define a  project to minimize
                    sulfur  and dust emissions  which was presented  to the
                    Norwegian State Pollution Control Authority on March 1,
                    1995.  The Authority has prepared an  internal study of
                    the   report  and   the  Authority s   draft  for   new
                    concessions  was  presented  to  the  joint  venture in
                    February   1996.    Based   on  a  consensus   for  the
                    metallurgical industry, the joint venture has initiated
                    discussions  with  the Authority  to  obtain acceptable
                    emissions  levels.    The  costs  associated  with  the
                    implementation   of   environmental   expenditures  are
                    uncertain as a result of various alternatives presently
                    being considered by the Norwegian joint venture.


               b.   Legal Matters

                    (i) Federal Proceedings and Related Matters

                    In February  1994, the Company,  its former  President,
                    its former  Executive Vice President and  certain other
                    parties were the subject of an indictment under federal
                    antitrust  laws  (the  "Antitrust  Proceedings")  which
                    alleged, among other  things, that:   (a) prior to  the
                    mid-1980's and  from  the mid  1980's  continuing  into
                    1992,  the   defendants  and   unnamed  co-conspirators
                    entered  into   and  engaged  in   a  combination   and
                    conspiracy  to fix  the prices  of artificial  abrasive
                    grain  in restraint of interstate trade; (b) during the
                    same  period,  the  Company  and its  former  President
                    willfully  violated the terms of a Consent Decree dated
                    November 16, 1948 against the Company and its officers,
                    which  permanently  enjoined  them  from entering  into
                    conspiracies   or  combinations   to   fix  prices   of
                    artificial abrasive  grain; and that (c)  the Company's
                    former Executive Vice President destroyed documents and
                    made false  declarations in  response to  a grand  jury
                    subpoena  issued in an  investigation of   price fixing
                    for artificial abrasive grain.  On July 12, 1996 a Plea
                    Agreement was executed by  the United States Department
                    of Justice  and the Company  in full settlement  of the
                    Criminal  Antitrust  Proceedings  pending  against  the
                    Company.   The Plea Agreement provides that the Company
                    will  plead guilty to contempt of court in violation of
                    the 1948 Consent  Decree described in  (b) above.   All
                    other  charges against the  Company will  be dismissed.
                    The Company has agreed to pay a  fine totaling $100,000
                    plus  a  $200   special  assessment.    There   are  no
                    conditions  of  probation  or  any  further   penalties
                    provided.   In  addition,  all  antitrust  and  consent
                    decree  violation  charges  against  individual  former
                    officers of  the Company  as set forth  in (a)  and (b)
                    above  will be  dismissed.    This  Agreement  must  be
                    approved  by the Federal District Court for the Western
                    District of New York, which has the authority to accept
                    the  Plea Agreement or  to reject  it in  its entirety.
                    The Court is presently reviewing the Plea Agreement.  A
                    pre-sentencing report was ordered by the Court from the
                    U.S. Probation Department.  The  report was sent to the
                    Court on October 23, 1996 and the Company is  currently
                    awaiting  directions from the Court as  to how the case
                    will proceed.

                    On December 8, 1994, in an ex parte proceeding the U.S.
                    Defense   Logistics  Agency   (the   "DLA")  issued   a
                    Memorandum of  Decision that temporarily  suspended the
                    defendants   in   the    Antitrust   Proceedings   from
                    contracting with the U.S. Government under  procurement
                    or non-procurement  programs pending the  completion of
                    the  Antitrust Proceedings.   On January 31,  1995, the
                    DLA amended the Memorandum of Decision (as amended, the
                    "DLA  Suspension") to include  under the DLA Suspension
                    sixteen alleged affiliates of  the defendants including
                    the Company's subsidiary, Exolon-ESK Company of  Canada
                    Ltd., and Orkla-Exolon   K/S, the Norwegian partnership
                    in  which the  Company's subsidiary, Norsk  Exolon A/S,
                    has a  50% partnership  interest.   The DLA  Suspension
                    alleges   as  causes   for  the   suspension   (i)  the
                    indictments   of   the   parties   in   the   Antitrust
                    Proceedings, and (ii) on  separate occasions in October
                    and November of 1994 the Company s former President and
                    former  Executive  Vice   President  individually  made
                    alleged  false certifications  in  DLA sales  contracts
                    denying  the existence within  the past three  years of
                    any indictments  of the  kind involved  in the  pending
                    Antitrust  Proceedings.   A jury  trial  on a  separate
                    criminal complaint  against the Company and  the former
                    Executive  Vice President  based  on the  alleged false
                    certifications in DLA sales contracts found the Company
                    and the former  Executive Vice President not  guilty of
                    all charges.

                    In general,  the  DLA Suspension  provides, during  the
                    term of the suspension, that the suspended parties will
                    be  prohibited from  entering  into new  contracts,  or
                    renewing  or  extending  old contracts  with  the  U.S.
                    Government  or its  agencies, unless  the  head of  the
                    contracting  agency states in  writing that there  is a
                    compelling  reason to do so; that the suspended parties
                    may not conduct business with the U.S. Government as an
                    agent or  representative of other contractors;  that no
                    U.S. Government contractor may award a suspended  party
                    a  subcontract in  excess of  $25,000  unless there  is
                    compelling  reason to do  so and the  contracting party
                    complies  with  certain notification  provisions;  and,
                    that  each  suspended   party's  relationship  to   any
                    organization doing business with the government will be
                    examined to determine the impact  of those ties on  the
                    responsibility  of  the  other  organization  to  be  a
                    government contractor or subcontractor.

                    At this  time, the Company  is not able to  predict the
                    amount and nature  of criminal penalties or  fines that
                    might  be imposed  against the  Company  or its  former
                    President or  former Executive  Vice President,  if the
                    Plea Agreement  was not accepted  and any of  them were
                    convicted   of  any  of  the  charges  alleged  in  the
                    Antitrust  Proceedings.    However,  if  the  Antitrust
                    Proceedings  were resolved in  a manner adverse  to the
                    Company, such penalties or  fines could be  substantial
                    and could materially adversely affect the Company.  The
                    Company believes there are  meritorious defenses to the
                    alleged  violations and is actively seeking to have the
                    Plea Agreement accepted by the Court.  Accordingly, the
                    Company believes  that the  DLA  Suspension against  it
                    will  be  lifted  at the  conclusion  of  the Antitrust
                    Proceedings.  The Company  intends to vigorously defend
                    against the Antitrust  Proceedings and to seek  to have
                    the  DLA  Suspension  against  it  lifted  as  soon  as
                    possible.

                    The DLA Suspension, for so long as it remains in force,
                    will prevent the Company from purchasing crude abrasive
                    grains from U.S. Government stockpiles, unless the head
                    of  the contracting agency states in writing that there
                    is  a  compelling  reason   to  permit  such  purchase.
                    Nonetheless, it is not otherwise expected to impact the
                    Company's  operations as the Company does not deal with
                    the U.S. Government as  a contractor or  subcontractor.
                    As  long  as there  is  an  adequate  supply  of  crude
                    abrasive grains and  the U.S. Government does  not sell
                    this  grain from its stockpiles at below market prices,
                    the DLA  Suspension is not expected to  have a material
                    adverse effect on the Company's operations.  Presently,
                    and for at  least the next 9 month  period, the Company
                    expects crude abrasive grains to be in adequate supply.
                    However,  the Company is  unable to predict  under what
                    circumstances the U.S. Government  might choose to sell
                    from its  stockpiles.    If it  were  to  undertake  an
                    aggressive program of selling  abrasive grains at below
                    market  prices,  the  Company  could  be  placed  at  a
                    disadvantage in relation to its competitors.

                    On October  18, 1994,  a lawsuit  was commenced  in the
                    U.S.  District  Court  for   the  Eastern  District  of
                    Pennsylvania (No. 94-CV-6332) under the title  "General
                    Refractories  Company   v.  Washington   Mills  Electro
                    Minerals Corporation and Exolon-ESK Company."  The suit
                    purports  to be a  class action seeking  treble damages
                    from  the  defendants  for  allegedly  conspiring  with
                    unnamed co-conspirators during the  period from January
                    1,  1985 through  the  date of  the  complaint to  fix,
                    raise, maintain  and stabilize the  price of artificial
                    abrasive grains and to  allocate among themselves their
                    major customers or accounts for purchases of artificial
                    grains, in violation  of Section 1 of the  Sherman Act,
                    15 U.S.C.   1.   The plaintiffs allegedly paid more for
                    abrasive  grain products than  they would have  paid in
                    the  absence of  such  anti-trust  violations and  were
                    allegedly  damaged in an amount that they are presently
                    unable  to determine.  On  or about  July  17, 1995,  a
                    lawsuit  captioned   Arden  Architectural  Specialties,
                    Inc. v. Washington  Mills Electro Minerals  Corporation
                    and   Exolon-ESK   Company,     (95-CV-05745(m)),   was
                    commenced in the  United States District Court  for the
                    Western  District of New York.  The Arden Architectural
                    Specialties  complaint purports  to  be a  class action
                    that  is  based  on  the same  matters  alleged  in the
                    General Refractories complaint.   The Company  believes
                    that it has  meritorious defenses  to the  allegations,
                    and  it   intends  to  vigorously  defend  against  the
                    charges.

                    In  addition  to  the  potential  liabilities  that the
                    Company may experience in the legal proceedings brought
                    by the  Department of  Justice and  third parties,  the
                    Company  may  incur   material  expenses  in  defending
                    against the  actions, and  it may  incur such  expenses
                    even if it is found to have no liability for any of the
                    charges asserted against it.

                    (ii)  Exolon-ESK Company of Canada, Ltd.

                    In June 1993, the Company  commenced a legal action  in
                    Ontario, Canada Court (General Division) against one of
                    its  former officers  and  certain former  employees of
                    Exolon-ESK Company  of Canada, Ltd.  (Exolon-Canada) on
                    various  charges  related  to   allegations  that  they
                    defrauded  the  Company  and  Exolon-Canada  of  money,
                    property and  services over  many years (the   Canadian
                    Case ).  The  Company is seeking $2,000,000  in damages
                    together   with  such   other  damages   that  may   be
                    determined.   A reasonable estimation  of the Company's
                    potential  recovery, if  any, cannot  be  made at  this
                    time.  

                    On  February 29,  1996, the  Company  and Exolon-Canada
                    entered into a Final Release (the  Release ) with their
                    insurance carriers  whereby they agreed to  release the
                    carriers from all claims based on the activities of the
                    defendants in the  Canadian Case in consideration  of a
                    payment  of $535,000  Canadian (approximately  $375,000
                    U.S.).   Under the terms of the  Release, the insurance
                    carriers  denied any liability, and the payment may not
                    be indicative of the amount of any recovery that may be
                    obtained from  the defendants.  The  insurance carriers
                    have subrogated  all of  their third  party rights  and
                    claims to Exolon-ESK Company of Canada, Ltd.

          Item  2.   Management's  Discussion  and  Analysis  of  Financial
          Condition and Results of Operations

          Results of Operations

          Comparison of the  Nine Months Ended September 30,  1996 with the
          Nine Months Ended September 30, 1995

               Net  Sales. Total net sales  increased by 14% to $58,488,000
          during the nine months ended  September 30, 1996 from $51,402,000
          in the first  nine months  of 1995.   The $7,086,000 increase  is
          principally a  result of  an increase in  shipment volume  of the
          Company s  primary manufactured  and  purchased  products in  the
          first nine months of 1996 when compared to the first  nine months
          of  1995 as a result  of the continuation  of a strong abrasives,
          steel and automotive market within the U.S.

               Gross  Profit.  Gross  profit prior to  depreciation expense
          was $13,513,000 in the first nine months of 1996 when compared to
          $11,752,000 in the  first nine months of  1995.  As a  percent of
          net  sales, gross  margins were 23%  in the first  nine months of
          1996 compared to 23% in the same period of 1995. 

               Operating  Expenses.  Total  operating expenses increased to
          $6,319,000  in the  nine  months ended  September  30, 1996  from
          $6,092,000 in the same  period of 1995.  Operating  expenses as a
          percent of sales declined to 11% in the first nine months of 1996
          compared to 12%  in the first nine months of 1995.  The Company's
          largest  portion  of  operating  expense,  selling,  general  and
          administrative expense, increased to $4,071,000 in the first nine
          months of 1996 when compared  to $3,784,000 during the first nine
          months of 1995.  As a  percent of net sales, selling and  general
          and administrative expense  was 7.0% in the first  nine months of
          1996 compared to 7.4% in the same period of 1995.

               Operating  Income.   Operating income  increased  by 27%  to
          $7,194,000  in  the nine  months  ended September  30,  1996 from
          $5,660,000 in  the nine months  ended September 30, 1995,  due to
          the increase in net sales and reduced operating costs.

               Norwegian  Joint  Venture.   The  Company's  Norwegian joint
          venture,  Orkla Exolon  A/S, reported    pre-tax earnings  in the
          Company's  50% share  of the  venture was  $406,500 for  the nine
          months  ended September  30,  1996 versus  $771,000  in the  nine
          months  ended September  30, 1995.   The  Company's share  in the
          venture's  net  sales was  $6,094,000  in the  nine  months ended
          September 30, 1996  as compared to $5,725,000 in  the nine months
          ended September  30, 1995.   The  joint venture's  gross margins,
          prior to depreciation, decreased to 20% for the nine months ended
          September 30, 1996 versus 31% for the nine months ended September
          30, 1995  primarily due  to higher raw  material and  power costs
          incurred  in the first  nine months of 1996  when compared to the
          same period in 1995.

               Interest   and  Miscellaneous   Expense.  Interest   expense
          decreased  marginally in  the first  nine  months of  1996.   The
          Company s  bank debt was  reduced by approximately  $3,400,000 in
          the first  nine months of  1996 when compared  to the  first nine
          months of 1995.  

               Miscellaneous income of  $248,000 was reported in  the first
          nine months of 1996 compared to miscellaneous expense of $159,000
          in the  quarter ended September  30, 1995.  The  Company recorded
          $375,000 in miscellaneous income during the first quarter of 1996
          due to a payment for the settlement with its insurance carrier of
          a claim related to a legal action in Ontario, Canada Court.   For
          further information, reference is made to Note 7(b)(ii) beginning
          on page 9 of this Form 10-Q report.

               Income Tax.   The Company's  effective tax rate was  40% for
          the nine months ended September  30, 1996 as compared to  39% for
          the nine months ended September 30, 1995. 


          Comparison of the Three Months  Ended September 30, 1996 with the
          Three Months Ended September 30, 1995.

               Net  Sales.     Total  net  sales  increased  by   10.6%  to
          $18,903,000 in  the three  months ended  September 30, 1996  from
          $17,094,000  in  the  three  months  ended  September  30,  1995.
          Shipment  volume  of  the   Company s  primary  manufactured  and
          purchased  products increased by approximately 10.7% in the third
          quarter of 1996, when compared to the same period during 1995.

               Gross  Profit.  Gross  profit prior to  depreciation expense
          was $4,274,000 in the three  months ended September 30, 1996 when
          compared to $4,052,000  in the three months ended  June 30, 1995.
          As a percent of net sales, gross margins were 22.6% in the second
          quarter of 1996  compared to 23.7% in the third  quarter of 1995.
          The 1996 decrease  is primarily a result  of the increase in  raw
          material costs experienced by the Company in the third quarter of
          1996.

               Operating  Expenses.    Total operating  expenses  increased
          marginally in  the three  month period  ended September 30,  1996
          from   the  same   period  of   1995.     Selling,  general   and
          administrative  expense increased $105,000  in the  quarter ended
          September 30,  1996 when compared  to the quarter ended  June 30,
          1995.    As  a  percent   of  net  sales,  selling,  general  and
          administrative  expense  was 7%  in  the  third quarter  of  1996
          compared with 7% in the same period of 1995.

               Operating Income.  Operating income increased by $181,000 or
          9%  to $2,250,000 in the third quarter of 1996 from $2,069,000 in
          the third quarter  of 1995, primarily as a result of the increase
          in sales and gross profit.

               Norwegian  Joint Venture.  The Norwegian joint venture Orkla
          Exolon-A/S,  reported  the  Company s 50%  share  in  the pre-tax
          earnings of  the venture was  $25,000 for the three  months ended
          September 30, 1996 versus a pre-tax profit of $260,000 during the
          three months  ended September 30,  1995.  The Company s  share in
          the venture s net sales was  $2,336,000 in the three months ended
          September  30, 1996  when  compared to  $1,855,000  in the  three
          months  ended September  30, 1995.    The increase  in net  sales
          resulted primarily from an increase in European demand.

               Interest  and  Miscellaneous   Expense.    Interest  expense
          decreased by  $97,000 to  $284,000 in the  third quarter  of 1996
          from $381,000 during the third quarter of 1995.  The 26% decrease
          resulted  primarily from  lower  debt  levels  during  the  third
          quarter of 1996 when compared to the third quarter of 1995.

          Liquidity and Capital Resources

               As  of September 30,  1996, working capital  (current assets
          less  current liabilities)  has  decreased to  $18,643,000,  when
          compared  to  $21,414,000  as of  December  31,  1995.   Accounts
          receivable  increased  by  $1,025,000 as  of  September  30, 1996
          versus 1995  year end primarily  as a result  of the  increase in
          sales levels during the first nine months of 1996 versus the 1995
          year.   Inventory decreased by  $2,064,000 at September  30, 1996
          when compared to December 31,  1995.  Accounts payable  increased
          by $103,000 as of September 30,1996 versus December 31, 1995.  In
          addition, the  Company borrowed $2,000,000  on a short  term note
          with  a low  interest  rate  during the  second  quarter of  1996
          increasing current liabilities as of June 30, 1996.

               For the  nine  months ended  September  30, 1996,  net  cash
          provided by operating  activities was $6,381,000.   Cash reserves
          decreased by $347,000 at September  30, 1996 compared to December
          31, 1995.  Net cash  provided by operating activities in addition
          to the  reduction in cash reserves was used to fund $3,718,000 of
          capital expenditures in the nine months ended June 30, 1996.

               The  Company's  current ratio  decreased  to 2.9  to  1.0 at
          September 30, 1996, from 3.7 to 1.0 as of December 31, 1995.  The
          ratio  of total liabilities  to shareholder's equity  improved to
          1.0  to 1.0  as of  September 30,  1996, from  1.3  to 1.0  as of
          December 31, 1995.  Management believes that the cash provided by
          operations  and  long-term  borrowing arrangements  will  provide
          adequate  funds for current commitments and other requirements in
          the near future.

               The  Company has been directed by the Illinois Environmental
          Protection Agency ("IEPA") to control its sulfur emissions at its
          Hennepin, Illinois silicon  carbide furnace plant.    For further
          information  see  Note  7(a)(i)  to  the  Notes  to  Consolidated
          Financial Statements  on page 7, which is  incorporated herein by
          reference.

               Reference is made to the descriptions of the following legal
          matters, within Note 7(b) to the Notes to  Consolidated Financial
          Statements  under the caption  Legal Matters  beginning on page 8
          of this  Form 10-Q  Report, which  descriptions are  incorporated
          herein by reference: (1) a legal action commenced in June 1993 by
          the  Company in  Ontario, Canada  seeking  $2,000,000 in  damages
          against  certain former  officers  and  employees; (2)  antitrust
          proceedings  commenced in February  1994 against the  Company and
          others; (3) a  temporary suspension imposed upon  the Company and
          others in December 1994 by the U.S. Defense Logistics Agency; and
          (4) civil  law  suits  brought  against the  Company  and  others
          commenced  by General Refractories Company in October 1994 and by
          Arden Architectural Specialties, Inc. in July 1995.


                             PART II - OTHER INFORMATION

          Item 1.  Legal Proceedings

               a.   Environmental Proceedings - Hennepin, Illinois Plant

                    Reference  is made  to the information  presented under
                    the heading "Environmental Issues - Hennepin,  Illinois
                    Plant" appearing  under Note  7(a)(i) to  the Notes  to
                    Consolidated Financial  Statements  on page  7 of  this
                    Form  10-Q  Report,  which is  incorporated  herein  by
                    reference.

               b.   Exolon-ESK Company  and Exolon-ESK  Company of  Canada,
                    Ltd. v. Michael Perrotto, et al.

                    Reference is made to the information contained in "PART
                    II,  Item  1.  Legal  Proceedings,  under  the  heading
                    "Exolon-ESK Company and  Exolon-ESK Company of  Canada,
                    Ltd. v. Michael Perrotto, et al." (the  Perrotto Case )
                    in the Company's Form 10-Q  Report for the period ended
                    September 30, 1993, which is hereby incorporated herein
                    by reference.

                    On  February 29,  1996, the  Company and  Exolon-Canada
                    entered into a Final Release (the  Release ) with their
                    insurance carriers  whereby they agreed to  release the
                    carriers from all claims based on the activities of the
                    defendants  in the Perrotto Case, in consideration of a
                    payment  of $535,000  Canadian (approximately  $390,000
                    U.S.).  Under the  terms of the Release,  the insurance
                    carriers  denied any liability, and the payment may not
                    be indicative of the amount of any recovery that may be
                    obtained from  the defendants.  The  insurance carriers
                    have subrogated  all of  their third  party rights  and
                    claims to Exolon-Canada.
          
               c.   Federal Proceedings

                    Reference  is made to the information contained in Part
                    I, Item 3. Legal Proceedings under the heading "Federal
                    Indictments" contained in the Company's  1993 Form 10-K
                    Report,  which   is  hereby   incorporated  herein   by
                    reference.   The  proceedings described  thereunder are
                    hereinafter referred to as the  Antitrust Proceedings .

                    Reference is made to the information concerning the DLA
                    Suspension  contained in Note  7(b)(i) of the  Notes to
                    Consolidated Financial  Statements beginning on  page 8
                    of  this Form  10-Q, which  is  incorporated herein  by
                    reference.

               d.   General  Refractories   Company  v.   Washington  Mills
                    Electro Minerals Corporation and Exolon-ESK Company

                    The description of  a class action lawsuit  relating to
                    claims  under   the  Sherman  Act  brought  by  General
                    Refractories Company  against Washington  Mills Electro
                    Mineral  Corporation and  the Company,  appearing under
                    the  heading  Legal  Matters  under  Note  7(b) to  the
                    Notes to  Consolidated Financial Statements on  Page 10
                    of  the Company s  Form 10-Q  reported  for the  period
                    ended  March  31,  1995,  is   incorporated  herein  by
                    reference.   On  or about  July  17, 1995,  a law  suit
                    captioned   Arden  Architectural Specialties,  Inc.  v.
                    Washington  Mills  Electro   Minerals  Corporation  and
                    Exolon-ESK Company,  (95-CV-05745(m)), was commenced in
                    the  United  States  District  Court  for  the  Western
                    District  of  New   York.    The   Arden  Architectural
                    Specialties  complaint  purports to  be a  class action
                    that  is  based  on  the same  matters  alleged  in the
                    General Refractories complaint.
          

          Item 2.  Change in Securities

               None

          Item 3.  Defaults Upon Senior Securities

               None

          Item 4.  Submission of Matters to a Vote of Security Holders

               None

          Item 5.  Other Information

               None

          Item 6.  Exhibits and Reports on Form 8-K

               Computation of Earnings Per Share, Exhibit 11

               Financial Data Schedule, Exhibit 27


          
                                      SIGNATURE

               Pursuant  to the requirements of the Securities Exchange Act
          of 1934, the  registrant has duly caused this report to be signed
          on its behalf by the undersigned thereunto duly authorized.



          
          EXOLON-ESK COMPANY



          /s/ J. Fred Silver 
          ____________________                                 
          J. Fred Silver
          President and Chief Executive Officer




          /s/ Michael H. Bieger
          ____________________
          Michael H. Bieger
          Vice President Finance and 
          Chief Financial Officer




          Date:     November 13, 1996



          
                                   EXHIBIT INDEX
          Exhibit          Description                   Reference
            No.

         3A        Restated Certificate of      Exhibit 3A to the report
                   Incorporation                on Form 10-K for the year
                                                ended December 31, 1995*

         3A(1)     Certificate of Merger        Exhibit 3A(1) to the
                                                report on Form 10-K for
                                                the year ended December
                                                31, 1995*

         3F        Certificate of Amendment of  Exhibit 3F to the report
                   Restated Certificate of      on Form 10-K for the year
                   Incorporation dated April    ended December 31, 1994*
                   23, 1986

         3G        Certificate of Amendment of  Exhibit 3G to the report
                   Restated Certificate of      on Form 10-K for the year
                   Incorporation dated May 4,   ended December 31, 1994*
                   1987

         3H        Amendment of Certificate of  Exhibit 3H to the Report
                   Incorporation dated October  on Form 10-Q for the
                   28, 1992                     quarter ended September
                                                30, 1992*

         3J        Restated Bylaws containing   Exhibit 3J to the report
                   all previous amendments      on Form 10-Q for the
                   adopted                      quarter ended June 30,
                                                1996* 

         4         Instruments Defining Rights  Articles of
                   of Security Holders          Incorporation, Exhibits
                                                3A, and Exhibits 3F and
                                                3G to the Report on Form
                                                10-K for the year ended
                                                December 31, 1994*

         10D(23)   Revolving Credit Agreement   Exhibit 10D(23) to the
                   dated December 22, 1992      Report on Form 10-K for
                                                the year ended December
                                                31, 1992*

         10D(24)   Industrial Revenue Bond      Exhibit 10D(24)  to the
                   Agreement dated January 1,   Report on Form 10-K for
                   1993.                        the year ended December
                                                31, 1992*

         10F       Stockholder's Agreement      Exhibit 10F to the report
                   dated as of April 26, 1984   on Form 10-K for the year
                   between the Registrant and   ended December 31, 1995*
                   Wacker Chemical Corporation

         10G       Restated License Agreement   Exhibit 10G to the report
                   dated as of April 26, 1984   on Form 10-K for the year
                   among Elektroschmelzwerk     ended December 31, 1995*
                   Kempten GmbH, ESK
                   Corporation and the
                   Registrant 
          
         10H       Distributorship Agreement    Exhibit 10H to the report
                   dated April 27, 1984         on Form 10-K for the year
                   between Elektroschmelzwerk   ended December 31, 1995*
                   Kempten GmbH and the
                   Registrant
         
         10I       Indemnification Agreement    Exhibit 10I to the report
                   dated as of December 15,     on Form 10-K for the year
                   1984 between Wacker          ended December 31, 1995*
                   Chemical Corporation and
                   the Registrant 

         10K       Contract between Theeb,      Exhibit 10K  to the
                   Ltd. and the Exolon-ESK      Report on Form 10-K for
                   Company of Canada, Ltd.      the year ended December
                   dated February 28, 1985      31, 1992*

         10M       Federal Indictments dated    Exhibit 10M to the Report
                   February 11, 1994            on Form 10-K for the year
                                                ended December 31, 1993*


         11        Statement of computation of  Page 19
                   per share earnings
         
         15        Statement re Unaudited       None
                   Interim Financial
                   Information

         18        Letter re Change in          None
                   Accounting Principles

         19        Report Furnished to          None
                   Security Holders
         
         22        Published Report Regarding   None
                   Matters Submitted to Vote
                   of Security Holders

         23        Consents of Experts and      None
                   Counsel
         
         24        Power of Attorney            None

         27        Financial Data Schedule      Submitted electronically 

         99        Conditional Exhibits         None
         
         * Incorporated herein by reference