==============================================================================


               UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                         WASHINGTON, D.C.  20549-1004

                                  FORM 10-Q

(Mark One)

  X   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2006
                               ------------------

                                      OR

      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
----- EXCHANGE ACT OF 1934

For the transition period from            to
                               ----------    ----------

                       Commission File Number 01-15739
                                              --------

                           REUNION INDUSTRIES, INC.
            ------------------------------------------------------
            (Exact name of Registrant as specified in its charter)

        DELAWARE                                       06-1439715
------------------------                  ------------------------------------
(State of Incorporation)                  (I.R.S. Employer Identification No.)

                        11 STANWIX STREET, SUITE 1400
                       PITTSBURGH, PENNSYLVANIA  15222
         ------------------------------------------------------------
         (Address of principal executive offices, including zip code)

                                (412) 281-2111
             ----------------------------------------------------
             (Registrant's telephone number, including area code)

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
                                                      -----    -----
Indicate by check mark whether the Registrant is a
Large accelerated filer     Accelerated filer     Non-accelerated filer X
                       ---                   ---                       ---
Indicate by check mark whether the Registrant is a shell company Yes   No X
                                                                    ---  ---

At August 8, 2006, 17,419,019 shares of common stock, par value $.01 per
share, were outstanding.

                             Page 1 of 33 pages.


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               FORWARD-LOOKING STATEMENTS AND ASSOCIATED RISKS

	This report contains certain forward-looking statements within the
meaning of Section 27A of the Securities Act and Section 21E of the Exchange
Act that are intended to be covered by the safe harbors created thereby.  The
forward-looking statements contained in this report are enclosed in brackets
[ ] for ease of identification.  Note that all forward-looking statements
involve risks and uncertainties.  Factors which could cause the future results
and shareholder values to differ materially from those expressed in the
forward-looking statements include, but are not limited to, the strengths of
the markets which the Company serves, the Company's ability to generate
liquidity and the Company's ability to service its debts and meet financial
covenants.  Although the Company believes that the assumptions underlying the
forward-looking statements contained in this report are reasonable, any of the
assumptions could be inaccurate and, therefore, there can be no assurances
that the forward-looking statements included or incorporated by reference in
this report will prove to be accurate.  In light of the significant
uncertainties inherent in the forward-looking statements included or
incorporated by reference herein, the inclusion of such information should not
be regarded as a representation by the Company or any other person that the
Company's objectives and plans will be achieved.  In addition, the Company
does not intend to, and is not obligated to, update these forward-looking
statements after filing and distribution of this report, even if new
information, future events or other circumstances have made them incorrect or
misleading as of any future date.


                                     - 2 -



                           REUNION INDUSTRIES, INC.

                                    INDEX

                                                                      Page No.
                                                                      --------
PART I.   FINANCIAL INFORMATION

          Item 1.  Financial Statements

          Condensed Consolidated Balance Sheets at
            June 30, 2006 (unaudited) and December 31, 2005               4

          Condensed Consolidated Statements of Operations and
            Comprehensive Income (Loss) for the three and six
            months ended June 30, 2006 and 2005 (unaudited)               5

          Condensed Consolidated Statements of Cash Flows for the
            six months ended March 31, 2006 and 2005 (unaudited) 	        6

          Notes to Condensed Consolidated Financial Statements            7

          Item 2.  Management's Discussion and Analysis of
                     Financial Condition and Results of Operations       18

          Item 3.  Quantitative and Qualitative Disclosures
                     About Market Risk                                   27

          Item 4.  Controls and Procedures                               27


PART II.  OTHER INFORMATION

          Item 1.  Legal Proceedings                                     27

	    Item 2.	 Unregistered Sales of Equity Securities and
			 Use of Proceeds							 27

	    Item 3.  Defaults Upon Senior Securities			       28

	    Item 6.  Exhibits and Reports on Form 8-K                      28


SIGNATURES                                                               29

CERTIFICATIONS                                                           30

                                     - 3 -



PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

                    REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                     CONDENSED CONSOLIDATED BALANCE SHEETS
                     AT JUNE 30, 2006 AND DECEMBER 31, 2005
                                (in thousands)

                                               At June 30,     At December 31,
                                                     2006                2005
                                          ---------------      --------------
                                              (unaudited)
     ASSETS:
Cash and cash equivalents                        $  1,931            $  1,923
Receivables (net of allowance of
  $213 and $173, respectively)                      8,808               7,386
Inventories, net                                   13,279               8,606
Other current assets                                2,537               1,306
Current assets of discontinued operations             100               6,237
                                                 --------            --------
     Total current assets                          26,655              25,458

Property, plant and equipment, net                  4,349               4,594
Property, plant and equipment, held for sale        3,324               6,050
Due from related parties                              897                 891
Goodwill, net                                      10,994              10,994
Other assets, net                                   2,805               3,273
                                                 --------            --------
Total assets                                     $ 49,024            $ 51,260
                                                 ========            ========
     LIABILITIES AND STOCKHOLDERS' DEFICIT:
Notes payable                                    $  5,446            $  8,240
Debt in default                                    34,667              43,236
Trade payables                                      8,503               6,129
Accrued interest                                    8,861               8,052
Due to related parties                                255                 140
Other current liabilities                           6,229               5,264
Notes payable - related parties                       500                 500
Current liabilities of discontinued operations        160               2,641
                                                 --------            --------
     Total current liabilities                     64,621              74,202

Long-term debt                                          -                   -
Other liabilities                                   3,153               3,465
Non-current liabilities of discontinued
    Operations                                        781                 781
                                                 --------            --------
     Total liabilities                             68,555              78,448

Minority interests                                    196                 329

Commitments and contingent liabilities                  -                   -

Stockholders' deficit                             (19,727)            (27,517)
                                                 --------            --------
Total liabilities and stockholders' deficit      $ 49,024            $ 51,260
                                                 ========            ========

    See accompanying notes to condensed consolidated financial statements.

                                     - 4 -




                    REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                        AND COMPREHENSIVE INCOME (LOSS)
            FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2006 AND 2005
             (in thousands, except per share information)(unaudited)

                                    Three Months Ended      Six Months Ended
                                     June 30,   June 30,   June 30,   June 30,
                                        2006       2005       2006       2005
                                    --------   --------   --------   --------
Sales                               $ 14,800   $ 14,163   $ 28,441   $ 26,528
Cost of sales                         11,705     10,269     22,351     20,657
                                    --------   --------   --------   --------
  Gross profit                         3,095      3,894      6,090      5,871
Selling, general & administrative      1,638      1,902      3,371      3,695
Gain on debt extinguishments          (4,020)         -     (4,945)         -
Other (income), net                      (13)        (8)       (20)       (17)
                                     -------   --------    -------   --------
  Operating profit                     5,490      2,000      7,684      2,193
Interest expense, net                  2,001      2,145      4,163      4,264
                                     -------   --------    -------   --------
Income (loss) from continuing
  operations before income taxes
  and minority interests               3,489       (145)     3,521     (2,071)
Provision for income taxes                32         11         46         11
                                     -------   --------    -------   --------
Income (loss) from continuing
  operations before minority
  interests                            3,457       (156)     3,475     (2,082)
Minority interests                       133         71        192        144
                                     -------    -------    -------   --------
Income (loss) from continuing
  operations                           3,324       (227)     3,283     (2,226)
Gain on disposal of discontinued
  operations, net of tax of $-0-           -          -      4,319        370
Income from discontinued
  operations, net of tax of $-0-           -        479        161        734
                                     -------    -------    -------   --------

Net and comprehensive income (loss)  $ 3,324    $   252   $  7,763   $ (1,122)
                                     =======    =======    =======    =======
Earnings (loss) applicable to
  common stockholders                $ 3,324    $   252   $  7,763   $ (1,122)
                                     =======    =======    =======    =======
  Basic earnings (loss) per share:
Continuing operations                $  0.20    $ (0.01)  $   0.20   $  (0.14)
Discontinued operations                    -       0.03       0.26       0.07
                                     -------    -------    -------    -------
Income (loss) per share - basic      $  0.20    $  0.02   $   0.46   $  (0.07)
                                     =======    =======    =======    =======
Weighted average shares
  outstanding - basic                 17,067     16,317     16,863     16,298
                                     =======    =======    =======    =======
  Diluted income (loss) per share:
Continuing operations                $  0.15    $ (0.01)  $   0.15   $  (0.14)
Discontinued operations                    -       0.03       0.20       0.07
                                      ------    -------    -------    -------
Income (loss) per share - diluted    $  0.15    $  0.02   $   0.35   $  (0.07)
                                     =======    =======    =======    =======
Weighted average shares
  outstanding - diluted               22,171     16,317     22,088     16,298
                                     =======    =======    =======    =======

     See accompanying notes to condensed consolidated financial statements.
                                     - 5 -

                   REUNION INDUSTRIES, INC. AND SUBSIDIARIES
                CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
                FOR THE SIX MONTHS ENDED JUNE 30, 2006 AND 2005
                                (in thousands)
                                 (unaudited)

                                                           Six Months Ended
                                                                June 30,
                                                           2006        2005
                                                         --------    --------
Cash used in operating activities                        $ (3,066)   $ (1,211)
                                                         --------    --------
  Cash flow from investing activities:
Capital expenditures                                         (150)       (216)
Proceeds from asset sales                                  11,273       3,680
                                                         --------    --------
Cash provided by investing activities                      11,123       3,464
                                                         --------    --------
  Cash flow from financing activities:
Net change in revolving credit facility                    (3,119)       (752)
Repayments of debt                                         (4,612)     (1,387)
Proceeds from exercise of warrants					    7           -
China dividend paid to minority interest				 (325)       (212)
                                                         --------    --------
Cash used in financing activities                          (8,049)     (2,351)
                                                         --------    --------

Net increase(decrease) in cash and cash equivalents             8         (98)
Less: Change in cash of discontinued operations                 -          61
Cash and cash equivalents, beginning of period              1,923       1,146
                                                         --------    --------
Cash and cash equivalents, end of period                 $  1,931    $  1,109
                                                         ========    ========

Interest paid                                            $  1,467    $  1,401
                                                         ========    ========

     Non-cash financing activities:
Debt extinguishment, including accrued interest          $  4,945    $      -
                                                         ========    ========
Conversion of fees and interest                          $      -    $    378
                                                         ========    ========


    See accompanying notes to condensed consolidated financial statements.

                                     - 6 -




                  REUNION INDUSTRIES, INC. AND SUBSIDIARIES
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                               JUNE 30, 2006


NOTE 1:  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

     The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with accounting principles generally accepted
in the United States for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X.  Accordingly, they
do not include all of the information and footnotes required by accounting
principles generally accepted in the United States for complete financial
statements.  In the opinion of management, all normal recurring adjustments
considered necessary for a fair statement of the results of operations have
been included.  The results of operations for the six months ended June 30,
2006 are not necessarily indicative of the results of operations for the full
year.  When reading the financial information contained in this Quarterly
Report, reference should be made to the financial statements, schedule and
notes contained in the Company's Annual Report on Form 10-K for the year ended
December 31, 2005.

Going Concern

     These condensed consolidated financial statements have been prepared on a
going concern basis, which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of business.  At June 30,
2006, the Company had a deficiency in working capital of $38.0 million,
negative cash flow from operations for the six months then ended of $3.1
million, a deficiency in assets of $19.7 million and debt in default of $34.7
million. These conditions raise substantial doubt about the Company's ability
to continue as a going concern. These condensed consolidated financial
statements do not include any adjustments that might result from the outcome
of this uncertainty.

     Over the past several years, the Company has taken steps to improve its
liquidity and defer the principal maturities of a significant portion of its
debt.  During 2005, the Company sold its leaf spring business and all
operating assets of its Rostone business.  During the first quarter of 2006,
the Company sold its Oneida business, the remaining portion of its plastics
segment. (See Note 2: RECENT DEVELOPMENTS - Sale of Oneida.) Additionally,
during the first half of 2006, the Company effected a settlement with the
holder of a $1.017 million note payable and accrued interest of $308,000 from
the Company wherein the Company recognized a gain from this debt settlement of
$925,000 and effected a settlement with the holder of a $4.290 million
judgment and accrued interest of $880,000 payable by the Company, in
connection with which the Company recognized a gain from this debt settlement
of $4.0 million. (See Note 2: RECENT DEVELOPMENTS - Note Payable Settlements.)
 The Company is investigating other recapitalization scenarios in an effort to
provide additional liquidity and extinguishments or deferrals of debt
obligations.  Although the Company believes that it can accomplish these
plans, no assurances exist that it will. Failure to accomplish these plans
could have an adverse impact on the Company's liquidity, financial position
and future operations.


NOTE 2:  RECENT DEVELOPMENTS

Sale of Oneida

During the 2005 year, the Company decided to exit the plastics business. In
January 2006, the Company signed an Asset Purchase Agreement to sell
substantially all of the assets of its Oneida business to an unrelated entity.

						- 7 -

On March 2, 2006, effective March 1, 2006, the Company completed the sale for
a purchase price of $11,573,000 subject to a post-closing adjustment based on
a closing balance sheet.  Of the net sale proceeds, after deducting $374,621
in related expenses, $300,000 was put into a one-year escrow as security for
any claims by the buyer that may arise after the closing and is included in
current assets at June 30, 2006, $2,000,000 was used to pay down a note
payable to a private capital fund that is secured by the real estate of the
Company, $980,974 was used to completely pay off the existing Wachovia term
loan and the remaining $7,917,405 was used to pay down the revolving credit
facility. As a result, during the first quarter of 2006, the Company
recognized a gain on sale of $4.3 million, net of related expenses of sale and
estimated liabilities for future costs of $1.3 million.

Default Waiver

       In connection with the sale of Oneida, the Company and Wachovia entered
into an amendment to the loan and security agreement wherein Wachovia waived
the October 2005 and November 2005 defaults for failure to meet the minimum
monthly EBITDA amount, waived the then existing defaults arising from the
Company's failure to make interest payments to the holders of the 13% Senior
Notes prior to March 1, 2006 and lowered the monthly minimum EBITDA covenant
requirement from $300,000 to $250,000 beginning in March 2006. A private
capital fund, holder of a $3.5 million note from the Company, also waived such
cross defaults.  As a result, as of March 31, 2006, the Company was not in
default on its Wachovia or private capital fund debt. However, it was in
default on such debt at June 30, 2006. (See NOTE 3: SUBSEQUENT EVENT.)

Change in Officers

	Effective March 2, 2006, Charles E. Bradley, Sr. resigned his
officership as Chairman of the Board of Directors and Chief Executive Officer
of the Company.  However, he will continue to serve as a director.  Effective
March 2, 2006, the Board of Directors elected Mr. Kimball J. Bradley Chairman
of the Board of Directors and Chief Executive Officer.

Note Payable Settlements

	On March 2, 2006, the Company entered into a settlement agreement with
the holder of a $1.017 million note payable from the Company, pursuant to
which the Company paid the holder a total of $400,000 for such note and all
accrued interest.  Such settlement was effected on March 3, 2006, and the
Company recognized a gain from this debt settlement of $925,000 in the first
quarter of year 2006.

	On March 21, 2006, the Company entered into a settlement agreement with
the Stanwich Financial Services Corp. Liquidating Agent ("SFSC"), pursuant to
which the Company agreed to pay SFSC $1.125 million in settlement of its
existing $4.290 million judgment and all accrued interest.  In connection with
such agreement, the Company made a $150,000 payment to SFSC during the first
quarter of 2006. As provided in the settlement agreement, payment of the
remaining $975,000 amount was subject to bankruptcy court approval in SFSC's
Chapter 11 proceeding.  Such approval was received in May 2006, the final
payment was promptly made and the Company recognized a gain from this debt
settlement of $4.0 million in the second quarter of year 2006.

NOTE 3: SUBSEQUENT EVENT

     In addition to its prior payment defaults, the Company failed to make
$0.7 million quarterly interest payments on the Senior Notes that were due on
April 1 and July 1, 2006.  As a result, another event of default has occurred
under the Indenture ("Indenture Default") under which the Senior Notes were
issued. With an Indenture Default, holders of more than 25% of the principal
amount of the Senior Notes may, by written notice to the Company and to the
Trustee, declare the principal of and accrued but unpaid interest on all the

						- 8 -

Senior Notes to be immediately due and payable (an "acceleration"). However,
under an Intercreditor and Subordination Agreement entered into in December
2003 among Wachovia, the holders of the Senior Notes and certain other
lenders, the  Senior Note holders can not commence any action to enforce their
liens on any collateral for a 180 day period beginning after the date of
receipt by Wachovia, the senior secured lender, of a written notice from the
Senior Note holders informing Wachovia of such Indenture Default and demanding
acceleration.  At this date, neither the Company nor Wachovia has received
written notice of any acceleration. Both the April 1 and July 1, 2006 defaults
also constitute cross defaults under the Wachovia loan agreement and under the
documents securing the $3.5 million loan from a private capital fund. The
Senior Notes and all cross defaulted debt are shown as debt in default at June
30, 2006 and December 31, 2005.


NOTE 4:  DEBT

Long-term debt consists of the following (in thousands):
                                               At June 30,        December 31,
                                                     2006                2005
                                          ---------------      --------------
                                              (unaudited)

Wachovia revolving credit facility               $  6,669            $  9,788
Junior participation to revolving credit
  Facility (net of warrant value of $70
  and $139, respectively)                           6,030               5,961
Wachovia term loan                                      -               1,087
Note payable due December 1, 2006                   1,950               3,950
Note payable due December 5, 2006 (net of
  warrant value of $4 and $31, respectively)        3,496               3,469
13% senior notes (net of warrant value
  of $45 and $99, respectively)                    21,968              21,914
Notes payable                                           -               5,307
Note payable - related party                          500                 500
                                                 --------            --------

  Total long-term debt                             40,613              51,976
Classified as current                              (5,946)             (8,740)
Classified as in Default                          (34,667)            (43,236)
                                                 --------            --------
  Long-term debt                                 $      -            $      -
                                                 ========            ========


NOTE 5:  INVENTORIES

Inventories are comprised of the following (in thousands):
                                               At June 30,     At December 31,
                                                     2006                2005
                                              -----------      --------------
                                              (unaudited)
Raw material                                     $  6,994             $ 2,732
Work-in-process                                     3,365               2,997
Finished goods                                      2,920               2,877
                                                 --------            --------
  Inventories                                    $ 13,279             $ 8,606
                                                 ========            ========

	Inventories are valued at the lower of cost or market, cost being
determined on the first-in, first-out method.  The above amounts are net of
inventory reserves of $327 and $328 at June 30, 2006 and December 31, 2005,
respectively.

						- 9 -


NOTE 6:  STOCKHOLDERS' DEFICIT AND EARNINGS PER SHARE

     The following represents a reconciliation of the change in stockholders'
deficit for the six month period ended June 30, 2006 (in thousands):

                                                     Accum-
                          Par    Capital             ulated
                         Value     in                 Other
                           of    Excess    Accum-    Compre-
                         Common  of Par    ulated    hensive
                         Stock   Value     Deficit    Loss       Total
                         ------  -------  --------  --------   --------
At January 1, 2006         $167  $28,325  $(54,130) $ (1,879)  $(27,517)
  Activity (unaudited):
Exercise of warrants          7                                       7
Stock based employee
  compensation                        20                             20
Net income                    -        -     7,763         -      7,763
                           ----  -------  --------  --------   --------
At June 30, 2006           $174  $28,345  $(46,367) $ (1,879)  $(19,727)
                           ====  =======  ========  ========   ========

	During the second quarter, the Company issued 762,500 shares of its
common stock at a price of $0.01 per share, pursuant to the exercise of
warrants that had previously been issued by the Company.  The proceeds of such
exercise were added to the par value of common stock of the Company.
Additionally, during the second quarter, the Company recognized stock based
compensation expense of $20,000 related to options issued in 2005 based on the
provisions of SFAS 123R, "Share Based Payment" (Note 7).

     The computations of basic and diluted earnings (loss) per common share,
EPS (LPS), for the three and six month periods ended June 30, 2006 and 2005
are as follows (in thousands, except per share amounts)(unaudited):

                                                  Net
                                                Income               EPS
                                                (Loss)    Shares    (LPS)
                                               --------  --------  -------
     Three months ended June 30, 2006:
Income applicable to common stockholders,
  weighted average shares outstanding
  and basic EPS                                $  3,324   17,067  $  0.20
											 ======
Dilutive effect of stock options and warrants              5,104
                                               --------  --------
Income applicable to common stockholders,
  shares outstanding and diluted EPS           $  3,324   22,171  $  0.15
                                               ========  ========  =======

     Three months ended June 30, 2005:
Income applicable to common stockholders,
  weighted average shares outstanding
  and basic EPS                                $    252   16,317  $  0.02
											 =======

Dilutive effect of stock options and warrants                  -
                                               --------  --------
Income applicable to common stockholders,
  shares outstanding and diluted EPS           $    252   16,317  $  0.02
                                               ========  ========  =======




						- 10 -


     Six months ended June 30, 2006:
Income applicable to common stockholders,
  weighted average shares outstanding
  and basic EPS                                $  7,763   16,863  $  0.46
											 ======
Dilutive effect of stock options and warrants              5,225
                                               --------  --------
Income applicable to common stockholders,
  shares outstanding and diluted EPS           $  7,763   22,088  $  0.35
                                               ========  ========  =======

     Six months ended June 30, 2005:
Loss applicable to common stockholders,
  weighted average shares outstanding
  and basic LPS                                $ (1,122)  16,298  $ (0.07)
											 =======

Dilutive effect of stock options and warrants                  -
                                               --------  --------
Loss applicable to common stockholders,
  shares outstanding and diluted LPS           $ (1,122)  16,298  $ (0.07)
                                               ========  ========  =======

     At June 30, 2006 and 2005, the Company's stock options outstanding
totaled 1,370,000.  Such options included a dilutive component of 946,676 and
901,042 shares for the three and six month periods ended June 30, 2006,
respectively.  At June 30, 2006 and 2005, outstanding warrants to purchase the
Company's common stock totaled 4,173,489 and 4,073,249, respectively.  Such
warrants included a dilutive component of 4,157,466 and 4,323,779 shares for
the three and six month periods ended June 30, 2006, respectively.  Because
the Company had a loss from operations for the three and six month periods
ended June 30, 2005, inclusion of options and warrants has an anti-dilutive
effect on LPS.

NOTE 7:  STOCK BASED COMPENSATION ARRANGEMENTS

	In December 2004, the Financial Accounting Standards Board (FASB) issued
SFAS No. 123R, "Share-Based Payment".  SFAS No. 123R established standards for
the accounting for transactions in which an entity exchanges its equity
instruments for goods or services.  It also addresses transactions in which an
entity incurs liabilities in exchange for goods or services that are based on
the fair value of the entity's equity instruments or that may be settled by
the issuance of those equity instruments.  This statement requires a public
entity to measure the cost of employee services received in exchange for an
award of equity instruments based on the grant-date fair value of the award
(with limited exceptions).  That cost will be recognized over the period
during which an employee is required to provide service in exchange for the
award.

	SFAS No.123R is effective for all awards granted on or after January 1,
2006 and for awards modified, repurchased, or cancelled after that date.  SFAS
No.123R requires that compensation cost be recognized on or after the
effective date for the unvested portions of outstanding awards, as of the
effective date, based on the grant-date fair value of those awards calculated
under SFAS No.123, "Accounting for Stock-Based Compensation".  Share-based
compensation expenses include the impact of expensing the fair value of the
stock options as well as expenses associated with non-vested share awards.
The Company adopted the provisions of SFAS No.123R effective January 1, 2006,
using the modified prospective transition method.

	Prior to 2006, the Company applied the intrinsic-value based method of
accounting prescribed by Accounting Principles Board (APB) Opinion No.25,
"Accounting for Stock Issued to Employees", and related interpretations,


						- 11 -

including FASB Interpretation No.44, "Accounting for Certain Transactions
Involving Stock Compensation, an Interpretation of APB Opinion No. 25".  Under
this methodology, the Company adopted the disclosure requirements of SFAS
No.123, and recognized compensation expense only if, on the date of grant, the
market price of the underlying stock exceeded the exercise price.

	At June 30, 2006, the Company had two stock option plans, stockholder
approved, that permit the grants of share options and shares to its key
employees, directors and consultants.  As of June 30, 2006, 354,600 options
remain available for grant under these plans, 1,370,000 options have been
granted and 439,999 of the granted options are unvested. The Company believes
that such awards better align the interests of its key employees, directors
and consultants with those of its stockholders.  Option awards are generally
granted with an exercise price equal to the market value of the Company's
stock on the date of grant, generally vest over a two to three year period and
have exercise terms ranging from five to ten years.

     No new options were granted during the first half of 2006.  As to the
outstanding options at January 1, 2006, the fair value of such option grants
was estimated on the date of grant using the Black-Scholes option pricing
model. The Company is using the modified prospective application method to
transition to SFAS 123R. Accordingly, based on the requirements of SFAS 123R,
compensation cost will be recognized for all new awards beginning in 2006 as
well as for all unvested previously issued awards.  Under SFAS 123R, $20,000
of share based compensation expense was recognized in the first half of 2006
on prior year unvested options based upon the requisite outstanding service
period. For the six months ended June 30, 2005, the pro forma expense for
stock based compensation based on the provisions of SFAS 123 was $30,000.

     A summary of the status of the Company's stock options and warrants as of
June 30, 2006 and changes during the year is presented below:

                                                 Weighted
                                      Weighted    Average
                                       Average   Remaining    Aggregate
                                      Exercise  Contractual   Intrinsic
Fixed Options              Shares       Price      Term         Value
-------------             ---------   --------  -----------   ---------
Outstanding at January 1,
  and June 30, 2006       1,370,000     $0.25      5.0 yrs        -
                          =========
Options exercisable
  at June 30, 2006          930,001     $0.25      5.1 yrs        -
                          =========

A summary of the status of the Company's non-vested shares as of June 30, 2006
and changes during the quarter ended June30, 2006 is presented below:
                                                         Weighted
                                                          Average
                                                         Grant Date
Nonvested Shares                       Shares            Fair Value
----------------                      ---------         -----------
Nonvested at January 1 and
  March 1, 2006                       690,001              $0.23
                                                           =====
Vested on June 21, 2006               250,002              $0.11
                                      -------              =====
Nonvested at June 30, 2006            439,999              $0.25
                                      =======              =====

As of June 30, 2006, there was $20,030 of total unrecognized compensation cost
related to nonvested share-based compensation arrangements granted under the
Plans.  That cost is expected to be recognized over a period of two years.

						- 12 -


	The Company expects to issue shares upon exercise of the options from
its authorized but unissued shares of common stock.

     The following table summarizes information about stock options and
warrants outstanding at June 30, 2006:

                    Remaining           Number              Number
Exercise            Contractual         Outstanding         Exercisable
Price               Life                at 6/30/06          at 6/30/06
---------           -----------         -----------         -----------
$0.1800              9.00 years             400,000             283,334
$0.2000              4.00 years             400,000             266,667
$0.2500              7.08 years              70,000              46,667
$0.2750              2.00 years             100,000              66,667
$0.3520              2.50 years             400,000             266,666
                                          ---------           ---------
                                          1,370,000             930,001
                                          =========           =========


NOTE 8:  COMMITMENTS AND CONTINGENT LIABILITIES


     The Company is and has been involved in a number of lawsuits and
administrative proceedings, which have arisen in the ordinary course of
business of the Company and its subsidiaries. There has been no major changes
in such lawsuits since the Company's Annual Report filing on Form 10-K.

Product Warranties

     The Company provides for warranty claims at its cylinders segment.
Amounts accrued are estimates of future claims based on historical claims
experience or a management estimate related to a specifically identified
issue.  The Company reevaluates its product warranty reserve quarterly and
adjusts it based on changes in historical experience and identification of new
or resolution of prior specifically identified issues.  A tabular
reconciliation of the product warranty reserve for the six-month periods ended
June 30, 2006 and 2005 follows (in 000's):

                                                          June 30,
     Description                                     2006        2005
     ------------------------------------------    --------    --------
       Beginning balance                           $    133    $    100
     Add: Provision for estimated future claims          60          76
     Deduct: Cost of claims                             (55)        (59)
                                                   --------    --------
       Ending balance                              $    138    $    117
                                                   ========    ========















						- 13 -



NOTE 9:  OPERATING SEGMENT DISCLOSURES

     The following represents the disaggregation of financial data (in
thousands)(unaudited):
                                                      Capital     Total
                               Net Sales  EBITDA(1)   Spending  Assets(2)
                               ---------  ---------  ---------  ---------
Three months ended and
  at June 30, 2006:
--------------------------------                                 At 6/30
  Metals:                                                        --------
Pressure vessels                $  8,348   $  1,669   $     25   $ 20,499
Cylinders                          4,304        133         18      7,327
Grating                            2,148        416         13      4,008
                                --------   --------   --------   --------
  Subtotal                        14,800      2,218         56     31,834

Corporate and other                    -       (570)         -     13,766
Discontinued operations                -          -          -      3,424
                                --------   --------   --------   --------
  Totals                        $ 14,800      1,648   $     56   $ 49,024
                                ========              ========   ========
Gain on extinguishment of debt                4,020
Depreciation                                   (178)
Interest expense, net                        (2,001)
                                           --------
  Income from continuing operations
    before income taxes and
    minority interests                     $  3,489
                                           ========


Three months ended June 30, 2005
  and at December 31, 2005:
---------------------------------                                At 12/31
  Metals:                                                        --------
Pressure vessels                $  6,803   $  1,991   $     22   $ 14,114
Cylinders                          5,397        547         12      7,082
Grating                            1,963        270         10      4,158
                                --------   --------   --------   --------
  Subtotal Metals                 14,163      2,808         44     25,354

Corporate and other                    -       (573)         -     13,619
Discontinued operations                -          -         35     12,287
                                --------   --------   --------   --------
  Totals                        $ 14,163      2,235   $     79   $ 51,260
                                ========              ========   ========
Depreciation                                   (235)
Interest expense, net                        (2,145)
                                           --------
  Loss from continuing operations before
   income taxes and minority interests     $   (145)
                                           ========






						- 14 -







                                                    Capital
                               Net Sales  EBITDA(1)   Spending
                               ---------  ---------  ---------
Six months ended June 30, 2006:
--------------------------------
  Metals:
Pressure vessels                $ 16,119   $  3,116   $     35
Cylinders                          8,979        559         44
Grating                            3,343        604         32
                                --------   --------   --------
  Subtotal                        28,441      4,279        111

Corporate and other                    -     (1,183)         1
Discontinued operations                -          -         38
                                --------   --------   --------
  Totals                        $ 28,441      3,096   $    150
                                ========              ========
Gain on extinguishment of debt                4,945
Depreciation                                   (357)
Interest expense, net                        (4,163)
                                           --------
  Income from continuing operations
    before income taxes and
    minority interests                     $  3,521
                                           ========


Six months ended June 30, 2005:
---------------------------------
  Metals:
Pressure vessels                $ 12,055   $  2,380   $    127
Cylinders                         10,659        961         23
Grating                            3,814        482         11
                                --------   --------   --------
  Subtotal Metals                 26,528      3,823        161

Corporate and other                    -     (1,212)         -
Discontinued operations                -          -         55
                                --------   --------   --------
  Totals                        $ 26,528      2,611   $    216
                                ========              ========
Depreciation                                   (418)
Interest expense, net                        (4,264)
                                           --------
  Loss from continuing operations before
   income taxes and minority interests     $ (2,071)
                                           ========

(1) EBITDA is presented as it is the primary measurement used by management
    in assessing segment performance and not as an alternative measure of
    operating results or cash flow from operations as determined by accounting
    principles generally accepted in the United States, but because it is a
    widely accepted financial indicator of a company's ability to incur and
    service debt.

(2) Corporate and other assets at June 30, 2006 and at December 31, 2005
    includes $8.0 million of goodwill that relates to the Company's pressure
    vessels segment.  For evaluation purposes under SFAS No. 142,
    this goodwill is included in the carrying value of the pressure vessels
    segment.  At June 30, 2006 and December 31, 2005, goodwill of $1.5
    million is recorded at each of pressure vessels and cylinders.


 						- 15 -


NOTE 10:   DISCONTINUED OPERATIONS

	At June 30, 2006, the assets and liabilities of discontinued operations
are comprised of the remaining assets and liabilities of the Rostone business
and the Company's land and building in Milwaukee, WI that are held for sale.
Such assets and liabilities are as follows (in thousands):

     CURRENT ASSETS:
Other current assets                                 $    100
                                                     ========
     CURRENT LIABILITIES:
Trade payables                                       $    160
                                                     ========
     OTHER ASSETS:
Property, plant and equipment, held for sale         $  3,324
                                                     ========
     OTHER LIABILITIES:
Other liabilities                                    $    781
                                                     ========

	Results of discontinued operations for the quarter and six months ended
June 30, 2006 relate solely to Oneida while the results of discontinued
operations for the first quarter of 2005 include both Oneida and Rostone.  A
summarization of such results is as follows (in thousands):

3-months ended June 30, 2006         3-months ended June 30, 2005
---------------------------------    ---------------------------------
Net sales                 $ 3,163    Net sales                $  6,368
Income before taxes           161    Income before taxes           479


6-months ended June 30, 2006         6-months ended June 30, 2005
---------------------------------    ---------------------------------
Net sales                 $ 3,163    Net sales                $ 13,137
Income before taxes           161    Income before taxes           734

NOTE 11:  COMPONENTS OF BENEFIT COSTS

     The following tables present the components of net periodic benefit costs
for Metals pension and Metals and Corporate Executive Payroll other
postretirement plans for the three and six month periods ended June 30, 2006
and  2005 (000's)(unaudited):
                                        Pension              Postretirement
                                   ------------------      ------------------
                                     3-months ended          3-months ended
                                   ------------------      ------------------
                                        June 30,                June 30,
                                   ------------------      ------------------
                                    2006        2005        2006        2005
                                   ------      ------      ------       -----
Benefits earned during year        $   53      $   53      $   28      $   27
Interest cost                          60          57          29          28
  Amortization of:
Prior service cost                      4           4           -           -
Unrecognized net loss (gain)            8          16          18          18
Unrecognized net obligation             -           -          12          12
Expected return on plan assets        (72)        (55)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $   53      $   75      $   87      $   85
                                   ======      ======      ======      ======



						- 16 -

                                        Pension              Postretirement
                                   ------------------      ------------------
                                     6-months ended          6-months ended
                                   ------------------      ------------------
                                        June 30,                June 30,
                                   ------------------      ------------------
                                    2006        2005        2006        2005
                                   ------      ------      ------       -----
Benefits earned during year        $  106      $  106      $   56      $   54
Interest cost                         120         114          58          56
  Amortization of:
Prior service cost                      8           8           -           -
Unrecognized net loss (gain)           16          32          36          36
Unrecognized net obligation             -           -          24          24
Expected return on plan assets       (144)       (110)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $  106      $  150      $  174      $  170
                                   ======      ======      ======      ======
  	In May 2006, the Company made a required payment of $446,000 to the
Metals pension plan.

	The following tables present the components of net periodic benefit
costs for the discontinued plastics operation pension and other postretirement
plans for the three and six month periods ended June 30, 2006 and 2005
(000's)(unaudited):
                                        Pension              Postretirement
                                   ------------------      ------------------
                                     3-months ended          3-months ended
                                   ------------------      ------------------
                                         June 30,                June 30,
                                   ------------------      ------------------
                                    2006        2005        2006        2005
                                   ------      ------      ------      ------
Benefits earned during year        $    -      $    -      $    -      $    -
Interest cost                          55          56           8          12
  Amortization of:
Unrecognized net loss (gain)           17          15           -           -
Expected return on plan assets        (65)        (71)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $    7      $    -      $    8      $   12
                                   ======      ======      ======      ======
                                          Pension              Postretirement
                                   ------------------      ------------------
                                     6-months ended          6-months ended
                                   ------------------      ------------------
                                         June 30,                June 30,
                                   ------------------      ------------------
                                    2006        2005        2006        2005
                                   ------      ------      ------      ------
Benefits earned during year        $    -      $    -      $    -      $    -
Interest cost                         110         112          16          24
  Amortization of:
Unrecognized net loss (gain)           34          30           -           -
Expected return on plan assets       (130)       (142)          -           -
                                   ------      ------      ------      ------
Defined benefit pension and
  total other postretirement
  benefits costs                   $   14      $    -      $   16      $   24
                                   ======      ======      ======      ======
	The Company expects that it will not be required to contribute to the
discontinued plastics operation pension plan in 2006.

						- 17 -
PART I.   FINANCIAL INFORMATION

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

     The following discussion and analysis is provided to assist readers in
understanding financial performance during the periods presented and
significant trends which may impact future performance.  It should be read in
conjunction with the consolidated financial statements and accompanying notes
included elsewhere in this Form 10-Q and in conjunction with our annual report
on Form 10-K for the year ended December 31, 2005.

GENERAL

     The Company owns and operates industrial manufacturing operations that
design and manufacture engineered, high-quality products for specific customer
requirements, such as large-diameter seamless pressure vessels, hydraulic and
pneumatic cylinders and grating.


RESULTS OF OPERATIONS

Three Months Ended June 30, 2006 Compared to
  Three Months Ended June 30, 2005

     Net sales, gross margins and EBITDA percentages for the three months
ended 2006 and 2005 are as follows.  The percentages of EBITDA to net sales
excludes corporate and other EBITDA.  Including corporate and other EBITDA,
the percentages of consolidated EBITDA to net sales for the three month
periods ended June 30, 2006 and 2005 are 11.3% and 15.8%, respectively ($ in
thousands):

                       Net Sales        Gross Margin       EBITDA
                 --------------------  --------------  --------------
                    2006       2005     2006    2005    2006    2005
                 ---------  ---------  ------  ------  ------  ------
Pressure vessels $   8,348  $   6,803   21.9%   35.6%   20.0%   29.3%
Cylinders            4,304      5,397   17.7%   19.0%    3.1%   10.1%
Grating              2,148      1,963   27.7%   22.9%   19.3%   13.8%
                 ---------  ---------  ------  ------  ------  ------
  Totals         $  14,800  $  14,163   20.9%   27.5%   15.0%   19.8%
                 =========  =========  ======  ======  ======  ======

     Net sales for the second quarter of 2006 were up 4.5% from the same
quarter of 2005, primarily reflecting a 23% sales increase in pressure vessels
sales offset by a 20% decline in cylinders sales.  The increase in pressure
vessels sales is attributable to a much higher backlog going into the 2006
year and continuing into the second quarter of 2006 as compared to the
backlogs that existed in 2005. Pressure vessels backlog at the end of 2005 was
more than $5.5 million higher than the backlog at the end of 2004 and the
backlog at March 31, 2006 was $6.4 million higher than the backlog that
existed at March 31, 2005. Such increased backlogs resulted in an increase in
sales during the second quarter of 2006 when compared to the second quarter of
2005.  Pressure vessels backlog at June 30, 2006 continues to be strong and is
more than $6 million higher than the comparable prior period backlog. The
decrease in cylinders sales primarily reflects a slow down in the mobile
cylinder line of business. A few large customers are delaying orders and
stretching out their delivery times to better accommodate their needs.  The
slight increase in grating sales reflects an improving business environment in
China reflecting opportunities generated by the Chinese government's new five-
year planning cycle.

     Gross margin as a percentage of sales decreased by 6.6 percentage points
in the second quarter of 2006 compared to the second quarter of 2005 primarily

						- 18 -

reflecting a much lower margin percentage in the pressure vessels segment.
Pressure vessels gross margin as a percent of sales was 21.9% in the second
quarter of 2006 as compared to 35.6% in the second quarter of 2005.  However,
the unusually high margin percentage in the 2005 period reflects a positive
gross margin percentage increase resulting from a business interruption
insurance claim advance payment which was received in that 2005 quarter, which
was related to a plant accident in the first quarter of 2005.  Absent that
unusual benefit, gross margin percentages in the pressure vessels segment
would still have been higher in the second quarter of 2005 over the comparable
2006 period by approximately 4.5% due mainly to product mix and the continuing
steel price increases that negatively impacted a portion of the existing
backlog heading into the 2006 year.  The decline in the cylinders gross margin
percentage and the increase in the grating gross margin percentage in the
quarter primarily reflect the change in the sales volume of those operations.

     Management evaluates the Company's segments based on EBITDA, a measure of
cash generation, which is presented, not as an alternative measure of
operating results or cash flow from operations as determined by accounting
principles generally accepted in the United States, but because it is a widely
accepted financial indicator of a company's ability to incur and service debt
and due to the close relationship it bears to the Company's financial
covenants in its borrowing agreements.  EBITDA and EBITDA as a percentage of
sales was lower in the second quarter of 2006 compared to 2005 primarily due
to the same factors affecting gross profit margin discussed above.  A
reconciliation of EBITDA to operating income for the three months ended June
30, 2006 and 2005 by segment and corporate and other is as follows
(000's)(unaudited):

                               Operating    Deprec-
                                  Profit     iation     EBITDA
                               ---------  ---------    ---------
2006:
-----
Pressure vessels                $  1,534   $    135    $  1,669
Cylinders                            103         30         133
Grating                              413          3         416
Corporate and other                 (580)        10        (570)
                                --------   --------    --------
  Totals                           1,470   $    178    $  1,648
                                           ========    ========
Gain on debt extinguishment        4,020
                                --------
  Operating profit              $  5,490
                                ========

2005:
-----
Pressure vessels                $  1,854   $    137    $  1,991
Cylinders                            511         36         547
Grating                              218         52         270
Corporate and other                 (583)        10        (573)
                                --------   --------    --------
  Totals                        $  2,000   $    235    $  2,235
                                ========   ========    ========


Selling, General and Administrative

     Selling, general and administrative (SGA) expenses for the second quarter
of 2006 were $1.6 million, down $264,000 from the expenses for the second
quarter of 2005.  This decrease in expense primarily reflects a decrease in
sales commissions and marketing expenses related to foreign sales in the
pressure vessels segment as year 2006 has a higher percentage of U.S. sales
compared to year 2005.  An increase in marketing expenses in the cylinder


						- 19 -

segment, mainly additional employees, was generally offset by decreased
expenses in general administrative expenses at all other businesses.  Such
expense reductions were partially related to reductions in staff and partially
related to other expense reductions. As a percentage of sales, SGA expenses
decreased to 10.9% for the second quarter of 2006 from 13.4% for the second
quarter of 2005. [The Company continues to look for ways to cut costs in all
areas.]

Gain on Debt Extinguishments

	There was a $4.0 million gain on debt extinguishment in the second
quarter of 2006 related to the final settlement of the SFSC $4.290 million
judgment and all accrued interest. (See NOTE 2 of NOTES TO CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS - Note Payable Settlements.) There was no
such gain in the comparable period in 2005.

Other Income

     Other income for the second quarter of 2006 was $13,000, compared to
other income of $8,000 for the second quarter of 2005. There were no
significant offsetting items of other income and expense in either period.

Minority Interests

     Minority interests for the second quarter in 2006 and 2005 was $133,000
and $71,000, respectively.  These amounts represent the income during the
quarter allocated to the minority ownerships of the Company's consolidated
foreign grating joint venture.  Minority interests are calculated based on the
percentage of minority ownership.

Interest Expense

     Interest expense for the second quarter of 2006 was $2.0 million compared
to $2.1 million for the second quarter of 2005.  This decrease basically
reflects the net change from several offsetting events.  Decreased interest
expense resulted from debt paid down via proceeds from the sale of Oneida in
the first quarter of 2006 and from the favorable settlements of a $1.017
million note payable and the SFSC debt in 2006 and the NapTech judgment in
July 2005.  These decreases were offset somewhat by an increase in Senior Note
interest expense as a result of accruing interest on missed interest payments
and by an increase in interest expense related to the $3.1 million increase in
the amount of the junior participation in the Wachovia loan facility in
connection with the settlement of the NapTech judgment.

Income Taxes

     The tax provision in 2006 and 2005 relates solely to the Company's China
joint venture.  The Company has net operating loss carryforwards for federal
tax return reporting purposes totaling $66.5 million at December 31, 2005.
The years in which such net operating losses expire are as follows (000's):
                        Year ending December 31:
                        ------------------------------
                        2007                  $  6,067
                        2008                       611
                        2009                     3,235
                        2010                     2,520
                        After 2010              54,067

     [The Company may be able to utilize its loss carryforwards against
possible increased future profitability.]  However, management has determined
to fully reserve for the total amount of net deferred tax assets as of June
30, 2006 [and to continue to do so during 2006 until management can conclude
that it is more likely than not that some or all of our loss carryforwards can
be utilized.]

						- 20 -

Six Months Ended June 30, 2006 Compared to
  Six Months Ended June 30, 2005

     Net sales, gross margins and EBITDA percentages for the six months ended
2006 and 2005 are as follows.  The percentages of EBITDA to net sales excludes
corporate and other EBITDA.  Including corporate and other EBITDA, the
percentages of consolidated EBITDA to net sales for the six month periods
ended June 30, 2006 and 2005 are 11.0% and 9.8%, respectively ($ in
thousands):

                       Net Sales        Gross Margin       EBITDA
                 --------------------  --------------  --------------
                    2006       2005     2006    2005    2006    2005
                 ---------  ---------  ------  ------  ------  ------
Pressure vessels $  16,119  $  12,055   21.9%   25.7%   19.3%   19.7%
Cylinders            8,979     10,659   17.9%   17.4%    6.2%    9.0%
Grating              3,343      3,814   28.7%   24.1%   18.0%   12.6%
                 ---------  ---------  ------  ------  ------  ------
  Totals         $  28,441  $  26,528   21.4%   22.1%   15.0%   14.4%
                 =========  =========  ======  ======  ======  ======

     Net sales for the first half of 2006 were up 7.2% from the same period of
2005, primarily reflecting a 34% sales increase in pressure vessels sales
offset by a 16% decline in cylinders sales and a 12% decline in grating sales.
The increase in pressure vessels sales is attributable to two main factors.
One factor is that the pressure vessels segment had a much higher backlog
going into the 2006 year as compared to the backlogs that existed at the
beginning of 2005. Pressure vessels backlog at the end of 2005 was more than
$5.5 million higher than the backlog at the beginning of 2005 and resulted in
higher sales in the first half of 2006 when compared to the first half of
2005.  Pressure vessels backlog at June 30, 2006 continues to be strong and is
more than $6 million higher than the comparable prior period backlog. The
other factor related to the increase in pressure vessel sales was that the
first quarter of 2005 at the pressure vessel segment was negatively impacted
by a plant accident that crippled the plant's heat treating operation and
prevented completion and shipment of product for more than five weeks.
Shipments delayed from such accident were eventually shipped but negatively
impact sales volume in the first half of the 2005 year. The decrease in
cylinders sales primarily reflects a slow down in the mobile cylinder line of
business. A few large customers are delaying orders and stretching out their
delivery times to better accommodate their needs.  The decrease in grating
sales reflects a slow first quarter related to the annual Chinese New Year
along with the end of the Chinese five-year planning cycle which limited
demand for new product late in the cycle.  The new five-year cycle is starting
up but the second quarter increase in grating sales over the prior year was
not sufficient to overcome this slow start and the grating segment reported
sales below the prior year for the first six months.

     Gross margin as a percentage of sales decreased by 0.7 percentage points
in the first half of 2006 compared to the comparable period of 2005 primarily
reflecting a lower margin percentage in the pressure vessels segment.
Pressure vessels gross margin as a percent of sales was 21.9% in the first
half of 2006 as compared to 25.7% in the first half of 2005.  The higher gross
margin percentage in the 2005 period is attributed to two main factors.  One
factor was a positive gross margin percentage increase resulting from a
business interruption insurance claim advance payment that was received in the
2005 period, which was related to the above referenced plant accident in the
first quarter of 2005.  The other factor was the negative impact on margins
due to product mix and the continuing steel price increases that negatively
impacted a portion of the existing backlog heading into the 2006 year.  The
increases in the cylinders gross margin percentage and the grating gross
margin percentage in the period is primarily attributable to sales price
increases instituted over the past year and reductions in manufacturing
overhead costs.

						- 21 -
     Management evaluates the Company's segments based on EBITDA, a measure of
cash generation, which is presented, not as an alternative measure of
operating results or cash flow from operations as determined by accounting
principles generally accepted in the United States, but because it is a widely
accepted financial indicator of a company's ability to incur and service debt
and due to the close relationship it bears to the Company's financial
covenants in its borrowing agreements.  EBITDA was higher in the first half of
2006 than in the first half of 2005 due basically to the higher sales volume
in the 2006 period.  EBITDA as a percentage of sales was lower in the second
quarter of 2006 compared to 2005 primarily due to the same factors affecting
gross profit margin discussed above.  A reconciliation of EBITDA to operating
income for the six months ended June 30, 2006 and 2005 by segment and
corporate and other is as follows (000's)(unaudited):

                               Operating    Deprec-
                                  Profit     iation     EBITDA
                               ---------  ---------    ---------
2006:
-----
Pressure vessels                $  2,846   $    270    $  3,116
Cylinders                            498         61         559
Grating                              598          6         604
Corporate and other               (1,203)        20      (1,183)
                                --------   --------    --------
  Totals                           2,739   $    357    $  3,116
                                           ========    ========
Gain on debt extinguishment        4,945
                                --------
  Operating profit              $  7,684
                                ========

2005:
-----
Pressure vessels                $  2,108   $    272    $  2,380
Cylinders                            891         70         961
Grating                              427         55         482
Corporate and other               (1,233)        21      (1,212)
                                --------   --------    --------
  Totals                        $  2,193   $    418    $  2,611
                                ========   ========    ========

Selling, General and Administrative

     Selling, general and administrative (SGA) expenses for the first half of
2006 were $3.4 million, down $324,000 from the expenses for the first half of
2005.  This decrease in expense primarily reflects a decrease in sales
commissions and marketing expenses related to foreign sales in the pressure
vessels segment as year 2006 has a higher percentage of U.S. sales compared to
year 2005.  An increase in marketing expenses in the cylinder
segment, mainly additional employees, was generally offset by decreased
expenses in general administrative expenses at all other businesses.  Such
expense reductions were partially related to reductions in staff and partially
related to other expense reductions. As a percentage of sales, SGA expenses
decreased to 11.8% for the first half of 2006 from 13.9% for the comparable
period in 2005. [The Company continues to look for ways to cut costs in all
areas.]

Gain on Debt Extinguishments

	There were $4.9 million of gains on debt extinguishment during the first
half of 2006.  Of this amount, $4.0 million related to the settlement of the
SFSC debt and $0.9 million related to the settlement of a $1.017 million note
payable.  (See NOTE 2 of NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
- Note Payable Settlements.) There were no such settlements in the first six
months of 2005.

						- 22 -

Other Income

     Other income for the first half of 2006 was $20,000, compared to other
income of $17,000 for the first half of 2005. There were no significant
offsetting items of other income and expense in either period.

Minority Interests

     Minority interests for the first half of 2006 and 2005 was $192,000 and
$144,000, respectively.  These amounts represent the income during the quarter
allocated to the minority ownerships of the Company's consolidated foreign
grating joint venture.  Minority interests are calculated based on the
percentage of minority ownership.  From a balance sheet perspective, minority
interest was reduced by the minority ownership's share of the 2006 dividend
declared in the first quarter of the year.

Interest Expense

     Interest expense for the first half of 2006 was $4.2 million compared to
$4.3 million for the first half of 2005.  This decrease basically reflects the
net change from several offsetting events.  Decreased interest expense
resulted from debt paid down via proceeds from the sale of Oneida in the first
quarter of 2006 and from the favorable settlements of a $1.017 million note
payable and the SFSC debt in 2006 and the NapTech judgment in July 2005.
These decreases were offset somewhat by an increase in Senior Note interest
expense as a result of accruing interest on missed interest payments and by an
increase in interest expense related to the $3.1 million increase in the
amount of the junior participation in the Wachovia loan facility in connection
with the settlement of the NapTech judgment.

Income Taxes

     The tax provision in 2006 and 2005 relates solely to the Company's China
joint venture.  The Company has net operating loss carryforwards for federal
tax return reporting purposes totaling $66.5 million at December 31, 2005.
The years in which such net operating losses expire are as follows (000's):
                        Year ending December 31:
                        ------------------------------
                        2007                  $  6,067
                        2008                       611
                        2009                     3,235
                        2010                     2,520
                        After 2010              54,067


     [The Company may be able to utilize its loss carryforwards against
possible increased future profitability.]  However, management has determined
to fully reserve for the total amount of net deferred tax assets as of June
30, 2006 [and to continue to do so during 2006 until management can conclude
that it is more likely than not that some or all of our loss carryforwards can
be utilized.]

LIQUIDITY AND CAPITAL RESOURCES

General

     The Company manages its liquidity as a consolidated enterprise.  The
operating groups of the Company carry minimal cash balances.  Cash generated
from group operating activities generally is used to repay borrowings under
revolving credit arrangements, as well as other uses (e.g. corporate
headquarters expenses, debt service, capital expenditures, etc.).  Conversely,
cash required for group operating activities generally is provided from funds
available under the same revolving credit arrangements.


						- 23 -


Recent Events

Sale of Oneida

       During the 2005 year, the Company decided to exit the plastics business.
In early 2006, the Company signed an Asset Purchase Agreement to sell
substantially all of the assets of its Oneida business to an unrelated entity.
On March 2, 2006, effective March 1, 2006, the Company completed the sale for
a purchase price of $11,573,000 subject to a post-closing adjustment based on
a closing balance sheet.  Of the net sale proceeds, after deducting $374,621
in related expenses, $300,000 was put into a one-year escrow as security for
any claims by the buyer that may arise after the closing and is included in
current assets at June 30, 2006, $2,000,000 was used to pay down a note
payable to a private capital fund that is secured by the real estate of the
Company, $980,974 was used to completely pay off the existing Wachovia term
loan and the remaining $7,917,405 was used to pay down the revolving credit
facility. As a result, during the first quarter of 2006, the Company
recognized a gain on sale of $4.3 million, net of related expenses of sale and
estimated liabilities for future costs of $1.3 million.

Default Waivers

       In connection with the sale of Oneida, the Company and Wachovia entered
into an amendment to the loan and security agreement wherein Wachovia waived
the October 2005 and November 2005 defaults for failure to meet the minimum
monthly EBITDA amount, waived the then existing defaults arising from the
Company's failure to make interest payments to the holders of the 13% Senior
Notes prior to March 1, 2006 and lowered the monthly minimum EBITDA covenant
requirement from $300,000 to $250,000 beginning in March 2006. A private
capital fund, holder of a $3.5 million note from the Company, also waived such
cross defaults.  As a result, as of March 31, 2006, the Company was not in
default on its Wachovia or private capital fund debt as of March 31, 2006.
(See SUBSEQUENT EVENTS below.)

Change in Officers

	Effective March 2, 2006, Charles E. Bradley, Sr. resigned his
officership as Chairman of the Board of Directors and Chief Executive Officer
of the Company.  However, he will continue to serve as a director.  Effective
March 2, 2006, the Board of Directors elected Mr. Kimball J. Bradley Chairman
of the Board of Directors and Chief Executive Officer.

Note Payable Settlements

	On March 2, the Company entered into a settlement agreement with the
holder of a $1.017 million note payable from the Company, pursuant to which
the Company paid the holder a total of $400,000 for such note and all accrued
interest.  Such settlement was effected on March 3, 2006, and the Company
recognized a gain from this debt settlement of $925,000 in the first quarter
of year 2006.

	On March 21, 2006, the Company entered into a settlement agreement with
the Stanwich Financial Services Corp. Liquidating Agent ("SFSC"), pursuant to
which the Company agreed to pay SFSC $1.125 million in settlement of its
existing $4.290 million judgment and all accrued interest.  In connection with
such agreement, the Company made a $150,000 payment to SFSC during the first
quarter of 2006. As provided in the settlement agreement, payment of the
remaining $975,000 amount was subject to bankruptcy court approval in SFSC's
Chapter 11 proceeding.  Such approval was received in May 2006, the final
payment was promptly made and the Company recognized a gain from this debt
settlement of $4.0 million in the second quarter of year 2006.



						- 24 -


SUBSEQUENT EVENTS

     In addition to its prior payment defaults, the Company failed to make
$0.7 million quarterly interest payments on the Senior Notes that were due on
April 1 and July 1, 2006.  As a result, another event of default has occurred
under the Indenture ("Indenture Default") under which the Senior Notes were
issued. With an Indenture Default, holders of more than 25% of the principal
amount of the Senior Notes may, by written notice to the Company and to the
Trustee, declare the principal of and accrued but unpaid interest on all the
Senior Notes to be immediately due and payable (an "acceleration"). However,
under an Intercreditor and Subordination Agreement entered into in December
2003 among Wachovia, the holders of the Senior Notes and certain other
lenders, the  Senior Note holders can not commence any action to enforce their
liens on any collateral for a 180 day period beginning after the date of
receipt by Wachovia, the senior secured lender, of a written notice from the
Senior Note holders informing Wachovia of such Indenture Default and demanding
acceleration.  At this date, neither the Company nor Wachovia has received
written notice of any acceleration. Both the April 1 and July 1, 2006 defaults
also constitute cross defaults under the Wachovia loan agreement and under the
documents securing the $3.5 million loan from a private capital fund.  The
Senior Notes and all cross defaulted debt are shown as debt in default at June
30, 2006 and December 31, 2005.


SUMMARY OF 2006 ACTIVITIES

     Cash and cash equivalents totaled $1.9 million at June 30, 2006,
approximately even with the comparable amount at December 31, 2005.  This
resulted from the $11.1 million of net cash provided by investing activities
being offset by $3.1 million of net cash used in operating activities and $8.0
million of cash used in financing activities. Cash and cash equivalents at the
end of a period represent U.S. lockbox receipts from customers to be applied
to our Wachovia revolving credit facility in the following one to two business
days as well as foreign cash resident in our Chinese joint venture.

Operating Activities

     Operating activities used $3.1 million in cash in the first half of 2006
resulting primarily from a growth of $6.1 million in receivables and
inventories offset somewhat by a growth in trade payables and other
liabilities.

Investing Activities

     Investing activities provided $11.1 million in cash as proceeds from the
sale of Oneida, as described above, were offset by capital expenditures of
$0.1 million.

Financing Activities

     The Company made scheduled repayments of the Wachovia term loan totaling
$106,000.  In connection with the sale of Oneida, as described above, the
Company paid an additional $1.0 million to Wachovia, in full satisfaction of
the remaining term loan, and paid $2.0 million on a note to a private capital
fund, which note is secured by liens of the Company's real estate.
Additionally, as described above in "Note Payable Settlements", the Company
paid a total of $1.5 million on two other notes. The revolving credit facility
borrowings decreased $3.1 million during the first half of 2006, primarily the
result of the sale of Oneida described above.




						- 25 -



FACTORS THAT COULD AFFECT FUTURE RESULTS

The Company's vendors may restrict credit terms

     We have corrected many vendor-related problems with liquidity generated
from the refinancing of debt and from asset sales.  However, another period of
tight liquidity could result in key vendors restricting or eliminating the
extension of credit terms to us.  If this would happen, our ability to obtain
raw materials would be strained significantly and our ability to manufacture
products would be reduced.

The Company's bank financing is currently in default

     As of June 30, 2006, we are in default on our senior notes, which has
caused cross defaults on our bank financing and other debt.  There are a
number of standstill provisions that exist in a previously executed
Intercreditor and Subordination Agreement that generally prohibit the senior
note holders and other lenders from commencing any action against the Company
until a certain specified time after notification has been received by
Wachovia or the Company.  No such notification has been received.  However,
any such notification would have adverse consequences on the liquidity,
financial position and operations of the Company.  Although it may be possible
to negotiate additional waivers of defaults, no assurances can be given that
we will be able to do so.

The Company's past performance could impact future prospects

     Because of losses suffered by the Company over the past several years,
potential or current customers may decide not to do business with us.  If this
were to happen, our sales may not increase or may decline.  If sales do not
increase, or we experience a decline in sales, our ability to cover costs
would be further reduced, which could negatively impact our financial position
and results of operations.

The Company as a going concern

	The financial statements have been prepared on a going concern basis,
which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business.  At June 30, 2006, the Company
has a deficiency in working capital of $38.0 million, a deficiency in assets
of $19.7 million and debt in default of $34.7 million.  These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
 The financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classifications of liabilities that may result from the
outcome of this uncertainty.

       The Company successfully refinanced its bank debt in 2003, extinguished
a significant portion of its obligations under the senior notes in 2003 and
2004 and removed all previously existing defaults on debt at that time. These
steps were taken to improve liquidity and defer the principal maturities on a
significant portion of our debt.  During 2005, the Company sold its leaf
spring business and all of the operating assets of its Rostone business.
Additionally, as described above, in March of 2006 the Company sold its Oneida
business, the remaining portion of its plastics segment. During 2006, the
Company completed favorable settlement agreements with two lenders and
generated $4.9 million in debt extinguishment gains.  The Company is
investigating other recapitalization scenarios in an effort to provide
additional liquidity and extinguishments or deferrals of debt obligations.
Although the Company believes that it can accomplish these plans, no
assurances exist that it will. Failure to accomplish these plans could have an
adverse impact on the Company's liquidity, financial position and future
operations.
						- 26 -



Item 3.   Quantitative and Qualitative Disclosures About Market Risk

     There have been no significant changes in the market risk factors which
affect the Company since the end of the preceding fiscal year.

Item 4. Controls and Procedures

      As required by Rule 13a-15(b) of the Securities Exchange Act of 1934, as
amended, the Company's management, including its Chief Executive Officer and
Chief Financial Officer, conducted an evaluation as of the end of the period
covered by this report, of the effectiveness of the Company's disclosure
controls and procedures as defined in Rule 13a-15(e). Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer concluded
that the Company's disclosure controls and procedures were effective as of the
end of the period covered by this report. As required by Rule 13a-15(d), the
Company's management, including its Chief Executive Officer and Chief
Financial Officer, also conducted an evaluation of the Company's internal
control over financial reporting to determine whether any changes occurred
during the quarter that have materially affected, or are reasonably likely to
materially affect, the Company's internal control over financial reporting. No
deterioration or changes were noted.
      It should be noted that any system of controls, however well designed
and operated, can provide only reasonable, and not absolute, assurance that
the objectives of the system will be met. In addition, the design of any
control system is based in part upon certain assumptions about the likelihood
of future events.


PART II.  OTHER INFORMATION

Item 1.   Legal Proceedings

     The Company is involved in various legal proceedings and environmental
matters.  There have been no significant changes in such proceedings or
matters since the end of the preceding fiscal year.

Item 2.   Unregistered Sales of Equity Securities and Use of Proceeds

	Effective May 12, 2006, a private fund lender and warrant holder
exercised warrants to acquire 762,500 of common stock of the Company for $0.01
per share.  The $7,625.00 of gross proceeds from the exercise of such warrants
were used to pay down the revolver and this amount was added to the carrying
value of the Company's common stock.

	The issuance of such shares is exempt from registration under Section
4(2) of the Securities Act of 1933 and Rule 506 of Regulation D promulgated by
the Securities and Exchange Commission under such Act, based on the following:
(1) this transaction is a private placement, (2) the private fund lender has
had access to the same kind of information about the Company that would be
included in a registration statement covering the shares issued, (3) the
private fund lender has represented to the Company that it is an "accredited
investor" with the meaning of Rule 501(a) of Regulation D and (4) the shares
issued may not be sold or transferred in the absence of an effective
registration statement under the Act covering such securities or an applicable
exemption from such registration.




						- 27 -






Item 3.   Defaults Upon Senior Securities

     In addition to its prior payment defaults, the Company failed to make
$0.7 million quarterly interest payments on the Senior Notes that were due on
April 1 and July 1, 2006.  As a result, another event of default has occurred
under the Indenture ("Indenture Default") under which the Senior Notes were
issued. The total interest in default on the $22.0 million of Senior Notes is
now $7.9 million. With an Indenture Default, holders of more than 25% of the
principal amount of the Senior Notes may, by written notice to the Company and
to the Trustee, declare the principal of and accrued but unpaid interest on
all the Senior Notes to be immediately due and payable (an "acceleration").
However, under an Intercreditor and Subordination Agreement entered into in
December 2003 among Wachovia, the holders of the Senior Notes and certain
other lenders, the  Senior Note holders can not commence any action to enforce
their liens on any collateral for a 180 day period beginning after the date of
receipt by Wachovia, the senior secured lender, of a written notice from the
Senior Note holders informing Wachovia of such Indenture Default and demanding
acceleration.  At this date, neither the Company nor Wachovia has received
written notice of any acceleration. Both the April 1 and July 1, 2006 defaults
also constitute cross defaults under the Wachovia loan agreement and under the
documents securing the $3.5 million loan from a private capital fund.

Item 6.   Exhibits

          (c)  Exhibits
               --------

               Exhibit No.  Exhibit Description
               -----------  -------------------
                   31.1     Certification of Chief Executive Officer
                            pursuant to Section 302 of the Sarbanes-Oxley
                            Act of 2002

                   31.2     Certification of Chief Financial Officer
                            pursuant to Section 302 of the Sarbanes-Oxley
                            Act of 2002

                   32.1     Certification pursuant to 18 U.S.C. 1350, as
                            adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002

                   32.2     Certification pursuant to 18 U.S.C. 1350, as
                            adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002


						- 28 -



                                  SIGNATURES

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, thereto duly authorized.

Date:  August 11, 2006                     REUNION INDUSTRIES, INC.
       -----------------                          (Registrant)

                                     By: /s/  Kimball J. Bradley
                                         -------------------------------
                                              Kimball J. Bradley
                                                Chairman and Chief
                                                Executive Officer




                                     By: /s/    John M. Froehlich
                                         -------------------------------
                                                John M. Froehlich
                                         Executive Vice President, Finance
                                           and Chief Financial Officer
                                     (chief financial and accounting officer)


                                  - 29 -




                                                                  EXHIBIT 31.1
                                  CERTIFICATION

I, Kimball J. Bradley, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Reunion Industries,
Inc.;

2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this
   report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material
   respects the financial condition, results of operations and cash flows
   of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
   (a) Designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by
   others within those entities, particularly during the period in which
   this report is being prepared;
   (b) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end
   of the period covered by this report based on such evaluation; and
   (c) Disclosed in this report any change in the registrant's internal
   control over financial reporting that occurred during the registrant's most
   recent fiscal quarter (the registrant's fourth fiscal quarter in the
   case of an annual report) that has materially affected, or is reasonably
   likely to materially affect, the registrant's internal control over
   financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting,
   to the registrant's auditors and the audit committee of the registrant's
   board of directors (or persons performing the equivalent functions):
   (a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and
   (b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.

Date:  August 11, 2006

/s/ Kimball J. Bradley
-------------------------------------
    Chief Executive Officer

                                  - 30 -



                                                                  EXHIBIT 31.2
                                  CERTIFICATION

I, John M. Froehlich, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Reunion Industries,
Inc.;

2. Based on my knowledge, this report does not contain any untrue statement
   of a material fact or omit to state a material fact necessary to make the
   statements made, in light of the circumstances under which such statements
   were made, not misleading with respect to the period covered by this
   report;

3. Based on my knowledge, the financial statements, and other financial
   information included in this report, fairly present in all material
   respects the financial condition, results of operations and cash flows
   of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for
   establishing and maintaining disclosure controls and procedures (as defined
   in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:
   (a) designed such disclosure controls and procedures, or caused such
   disclosure controls and procedures to be designed under our supervision,
   to ensure that material information relating to the registrant,
   including its consolidated subsidiaries, is made known to us by
   others within those entities, particularly during the period in which
   this report is being prepared;
   (b) Evaluated the effectiveness of the registrant's disclosure controls and
   procedures and presented in this report our conclusions about the
   effectiveness of the disclosure controls and procedures, as of the end
   of the period covered by this report based on such evaluation; and
   (c) Disclosed in this report any change in the registrant's internal
   control over financial reporting that occurred during the registrant's most
   recent fiscal quarter (the registrant's fourth fiscal quarter in the
   case of an annual report) that has materially affected, or is reasonably
   likely to materially affect, the registrant's internal control over
   financial reporting; and

5. The registrant's other certifying officer and I have disclosed, based on
   our most recent evaluation of internal control over financial reporting,
   to the registrant's auditors and the audit committee of the registrant's
   board of directors (or persons performing the equivalent functions):
   (a) All significant deficiencies and material weaknesses in the design or
   operation of internal control over financial reporting which are
   reasonably likely to adversely affect the registrant's ability to
   record, process, summarize and report financial information; and
   (b) Any fraud, whether or not material, that involves management or other
   employees who have a significant role in the registrant's internal
   control over financial reporting.

Date:  August 11, 2006

/s/ John M. Froehlich
-------------------------------------
    Chief Financial Officer

						- 31 -



                                                                  EXHIBIT 32.1

                             REUNION INDUSTRIES, INC.
                  SARBANES-OXLEY ACT SECTION 906 CERTIFICATION

In connection with this quarterly report on Form 10-Q of Reunion Industries,
Inc. for the quarter ended June 30, 2006, I, Kimball J. Bradley, Chief
Executive Officer of Reunion Industries, Inc., hereby certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 Of the Sarbanes-Oxley
Act of 2002, that:

1. this Form 10-Q for the quarter ended June 30, 2006 fully complies
   with the requirements of section 13(a) or 15(d) of the Securities Exchange
   Act of 1934; and

2. the information contained in this Form 10-Q for the quarter ended
   June 30, 2006 fairly presents, in all material respects, the financial
   condition and results of operations of Reunion Industries, Inc. for the
   periods presented therein.


Date: August 11, 2006

/s/ Kimball J. Bradley
---------------------------
Chief Executive Officer


                                   - 32 -



                                                                  EXHIBIT 32.2

                             REUNION INDUSTRIES, INC.
                  SARBANES-OXLEY ACT SECTION 906 CERTIFICATION

In connection with this quarterly report on Form 10-Q of Reunion Industries,
Inc. for the quarter ended June 30, 2006, I, John M. Froehlich, Chief
Financial Officer of Reunion Industries, Inc., hereby certify pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 Of the Sarbanes-Oxley
Act of 2002, that:


1. this Form 10-Q for the quarter ended June 30, 2006 fully complies
   with the requirements of section 13(a) or 15(d) of the Securities Exchange
   Act of 1934; and

2. the information contained in this Form 10-Q for the quarter ended
   June 30, 2006 fairly presents, in all material respects, the financial
   condition and results of operations of Reunion Industries, Inc. for the
   periods presented therein.


Date: August 11, 2006

/s/ John M. Froehlich
---------------------------
Chief Financial Officer

                                    - 33 -