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

                                   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 April 30, 1998

                                      OR

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

          For the transition period from _____________ to ______________

                                METALLURG, INC.
            ------------------------------------------------------
            (Exact Name of Registrant as Specified in Its Charter)

       DELAWARE                                             13-1661467
--------------------------------                           --------------------
(State or Other Jurisdiction of                             (I.R.S. Employer
Incorporation or Organization)                              Identification No.)


                             6 EAST 43{RD} STREET
                           NEW YORK, NEW YORK 10017
                   ----------------------------------------
                   (Address of Principal Executive Offices)
                                  (Zip Code)

                                (212) 835-0200
                                --------------
             (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 [   ]   No [ X ]

Indicate  by  check  mark  whether  the registrant has filed all documents  and
reports required to be filed by Sections  12,  13  or  15(d)  of the Securities
Exchange Act of 1934 subsequent to the distribution of securities  under a plan
confirmed by a court.
                                   Yes   X     No
                                        ---        ---

The  number  of shares of common stock, $0.01 par value, issued and outstanding
as of June 9,  1998  was 4,956,406.


<PAGE>
                METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

                                    INDEX

                                                                       PAGE NO.

Part I. FINANCIAL INFORMATION:

        Item 1 -  Financial Statements (Unaudited)

          Condensed Statements of Consolidated Operations
          for the Quarters Ended April 30, 1998 and March 31, 1997         3

          Condensed Statements of Consolidated Comprehensive Income
          for the Quarters Ended April 30, 1998 and March 31, 1997         4

          Condensed Consolidated Balance Sheets at April 30, 1998
          and January 31, 1998                                             5

          Condensed Statements of Consolidated Cash Flows for the
          Quarters Ended April 30, 1998 and March 31, 1997                 6

          Notes to Condensed Unaudited Consolidated Financial Statements   7-12

          Item 2 - Management's Discussion and Analysis of
          Financial Condition and Results of Operations                   13-16


Part II. OTHER INFORMATION

         Item 6. (a) EXHIBITS                                              17


              6. (b) REPORT ON FORM 8-K


         Signature Page                                                    18


                                      2
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED OPERATIONS (UNAUDITED)
(IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
                                                                      Reorganized             Predecessor
                                                                        Company                 Company
                                                                    ------------------      ---------------
                                                                     Quarter Ended             Quarter Ended
                                                                    April 30, 1998             March 31, 1997
                                                                    ------------------       ------------------
<S>                                                                        <C>                              <C> 
Total revenue ...................................................             $167,830              $155,587 
                                                                    ------------------       ------------------
Operating costs and expenses:
   Cost of sales ................................................              139,008              134,060
   Selling, general and administrative expenses .................               14,761               15,046
                                                                    ------------------       ------------------
   Total operating costs and expenses ...........................              153,769              149,106
                                                                    ------------------       ------------------
      Operating income ..........................................               14,061                6,481
Other income (expense):
   Other income, net ............................................                  878                3,179
   Interest income (expense), net ...............................               (2,072)                (245)
   Reorganization expense .......................................                    -               (2,663)
   Fresh-start revaluation ......................................                    -                5,107
                                                                    ------------------        -----------------
Income before income tax provision and
      extraordinary item ........................................               12,867               11,859
Income tax provision (benefit) ..................................                6,077               (3,063)
                                                                    ------------------        -----------------
Net income before extraordinary item ............................                6,790               14,922
Extraordinary item ..............................................                    -               43,032
                                                                    ------------------        -----------------
Net income ......................................................             $  6,790             $ 57,954
                                                                    ==================        =================

Weighted average shares outstanding..............................                4,956
                                                                    ==================
Basic and diluted earnings per share.............................             $   1.37
                                                                    ==================
</TABLE>

See notes to condensed unaudited consolidated financial statements.


                                      3
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED COMPREHENSIVE INCOME (UNAUDITED)
(IN THOUSANDS)


<TABLE>
<CAPTION>
                                                           Reorganized                    Predecessor
                                                             Company                        Company
                                                         ----------------               -----------------
                                                          Quarter Ended                  Quarter Ended
                                                         April 30, 1998                 March 31, 1997
                                                         ----------------               -----------------
<S>                                                      <C>                            <C>
Net income ...........................................             $6,790                        $57,954

Other comprehensive income (loss):
  Foreign currency translation adjustments (a)........                 76                         (1,224)
                                                         ----------------               -----------------

Comprehensive income .................................             $6,866                        $56,730
                                                         ================               =================


(a)   The  Company does not  provide  for  U.S.
income taxes  on  foreign  currency translation
adjustments  because it does  not  provide  for
such taxes on undistributed earnings of foreign
subsidiaries.
</TABLE>

See notes to condensed unaudited consolidated financial statements.


                                      4
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(IN THOUSANDS)

<TABLE>
<CAPTION>
                                                                   Reorganized Company
                                                          ------------------------------------------
                                                           April 30,                  January 31,
                                                             1998                        1998
                                                          ---------------             --------------
<S>                                                        <C>                        <C>
ASSETS
Current assets:
   Cash and cash equivalents ...........................         $ 50,221                   $ 43,003
   Accounts and notes receivable, net ..................           90,827                     83,931
   Inventories .........................................          116,574                    117,589
   Other assets ........................................           12,815                     14,239
                                                          ---------------               ------------
      Total current assets .............................          270,437                    258,762
Property, plant and equipment, net .....................           41,666                     41,502
Other assets ...........................................           18,569                     19,522
                                                          ---------------               ------------
      TOTAL ............................................         $330,672                   $319,786
                                                          ===============               ============

LIABILITIES
Current liabilities:
   Short-term debt and current portion
      of long-term debt ................................         $  3,975                   $  4,016
   Trade payables ......................................           54,383                     51,308
   Accrued expenses ....................................           31,537                     30,575
   Other current liabilities ...........................            6,592                      5,106
                                                          ---------------               ------------
      Total current liabilities ........................           96,487                     91,005
                                                          ---------------               ------------

Long-term debt .........................................          102,722                    103,133
Accrued pension liabilities ............................           37,473                     38,351
Environmental liabilities, net .........................           37,753                     38,527
Other liabilities ......................................            6,410                      6,999
                                                          ---------------               ------------
      Total long-term liabilities ......................          184,358                    187,010
                                                          ---------------               ------------

      Total liabilities ................................          280,845                    278,015
                                                          ---------------               ------------

SHAREHOLDERS' EQUITY
Common stock ...........................................               50                         50
Additional paid-in capital .............................           41,399                     40,209
Accumulated other comprehensive income .................              749                        673
Retained earnings ......................................            7,629                        839
                                                          ---------------               ------------
   Total shareholders' equity ..........................           49,827                     41,771
                                                          ---------------               ------------
      TOTAL ............................................         $330,672                   $319,786
                                                          ===============               ============
----------------------------------------------------------------------------------------------------
See notes to condensed unaudited consolidated financial statements.
</TABLE>


                                      5
<PAGE>
METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES
ITEM 1 - FINANCIAL STATEMENTS
CONDENSED STATEMENTS OF CONSOLIDATED CASH FLOWS (UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
                                                       Reorganized                       Predecessor
                                                         Company                           Company
                                                        ------------                      ---------
                                                         Quarter                           Quarter
                                                          Ended                             Ended
                                                        April 30,                         March 31,
                                                           1998                             1997
                                                        ------------                      ---------
<S>                                                    <C>                               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ............................................       $6,790                          $57,954
Adjustments to reconcile net income to net cash
provided by operating activities: .....................
  Executive stock awards ..............................          293                              500
  Extraordinary item ..................................            -                          (43,032)
  Fresh-start revaluation .............................            -                           (5,107)
  Depreciation and amortization .......................        2,188                            2,143
  Gain on sale of assets ..............................         (493)                          (3,266)
  Reorganization expense, net of payments .............         (169)                           1,538
  Deferred income taxes ...............................        1,272                           (3,767)
  Provision for doubtful accounts .....................          289                              162
  Provision for environmental costs, net of payments...         (558)                            (256)
  Other, net ..........................................        4,238                            3,057
                                                          ----------                       ----------
    Total .............................................       13,850                            9,926

Change in operating assets and liabilities:
  Increase in trade receivables .......................      (11,353)                         (20,272)
  Increase in inventories .............................         (297)                          (6,120)
  Decrease (increase) in other current assets .........        1,328                             (355)
  Increase in trade payables and accrued expenses .....        8,633                           18,895
  Decrease in prepetition liabilities .................            -                             (39)
  Receipt from environmental trust, net ...............            -                            5,928
  Other assets and liabilities, net ...................       (1,117)                          (1,547)
                                                          ----------                       -----------
    Net cash provided by operating activities .........       11,044                            6,416
                                                          ----------                       ----------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Additions to property, plant and equipment, net .....       (2,929)                          (2,774)
  Proceeds from asset sales ...........................        1,143                            4,966
  Other, net ..........................................       (1,781)                             (25)
                                                          -----------                      -----------
    Net cash (used in) provided by investing 
    activities ........................................       (3,567)                           2,167
                                                          -----------                      ----------

CASH FLOWS FROM FINANCING AND REORGANIZATION
  ACTIVITIES:
  Cash distribution pursuant to plan of 
   reorganization .....................................            -                          (59,366)
  Drawdown of prepetition letters of credit ...........            -                            9,700
  Proceeds from long-term debt, net ...................            -                            8,100
  Net short-term borrowings ...........................          146                            1,062
  Repayment of long-term debt .........................         (419)                            (487)
                                                          -----------                      -----------
    Net cash used in financing and reorganization 
     activities .......................................         (273)                         (40,991)
                                                          -----------                      -----------

Effects of exchange rate changes on cash and cash 
 equivalents ..........................................           14                             (526)
                                                          ----------                       -----------
Net increase (decrease) in cash and cash 
 equivalents ........................................          7,218                          (32,934)
Cash and cash equivalents - beginning of period .......       43,003                           63,274
                                                          ----------                       ----------
Cash and cash equivalents - end of period .............      $50,221                          $30,340
                                                          ==========                       ==========

See notes to condensed unaudited consolidated financial statements.


                                      6
<PAGE>

METALLURG, INC. AND CONSOLIDATED SUBSIDIARIES

NOTES TO CONDENSED UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

1.  Basis of Presentation

The  accompanying condensed unaudited consolidated financial statements include
the  accounts   of   Metallurg,   Inc.  ("Metallurg")  and  its  majority-owned
subsidiaries (collectively, the "Company").   These  financial  statements have
been  prepared in accordance with generally accepted accounting principles  for
interim  financial  information pursuant to Accounting Principles Board Opinion
No. 28.  Accordingly,  they do not include all of the information and footnotes
required by generally accepted  accounting  principles  for  complete financial
statements.   The condensed consolidated balance sheet as of January  31,  1998
and the condensed  statements  of  consolidated  operations and of consolidated
cash  flows  for  the quarter ended March 31, 1997 were  derived  from  audited
financial  statements.    In   the   opinion  of  management,  all  adjustments
(consisting of normal recurring adjustments)  considered  necessary  for a fair
presentation  have  been  included.   Operating results for the interim periods
presented are not necessarily indicative  of  the  results to be expected for a
full year.

On  February  26,  1997,  the  Fourth  Amended  and  Restated   Joint  Plan  of
Reorganization   (the  "Plan")  of  Metallurg  and  one  of  its  subsidiaries,
Shieldalloy Metallurgical  Corporation  ("Shieldalloy"),  was  confirmed by the
U.S.  Bankruptcy  Court  for  the  Southern District of New York.  Transactions
contemplated by the Plan were consummated  on  April  14,  1997 (the "Effective
Date").   For  financial  reporting  purposes,  the  Company has reflected  the
effects of the Plan consummation as of March 31, 1997.   As  a  result  of  the
consummation  of  the  Plan and the adoption of fresh-start reporting under the
American Institute of Certified  Public  Accountants'  ("AICPA")  Statement  of
Position 90-7, "Financial  Reporting by  Entities in  Reorganization  Under the
Bankruptcy Code", financial  statements for the  quarter  ended March 31, 1997,
which   includes  the  effects  of the adoption  of  fresh-start reporting  and
consummation  of  the  Plan,  are  referred  to as  the "Predecessor  Company".
Financial statements for  periods  subsequent to March 31, 1997 are referred to
as the "Reorganized  Company".  The financial statements  of the  Company after
consummation of  the  Plan  are  not comparable  to   the  Company's  financial
statements  of  prior  periods.

For further information,  see  the  financial  statements and footnotes thereto
included  in the Company's audited consolidated financial  statements  for  the
three quarters ended January 31, 1998 and the quarter ended March 31, 1997.

Effective April  1, 1997, the Company changed the reporting period of Metallurg
from a calendar year  ending December 31 to a fiscal year ending January 31 and
began reporting the results  of  its operating subsidiaries on a one-month lag.
Accordingly, the quarter ended April  30,  1998  includes  worldwide  operating
results  for  the  three  months ended March 31, 1998 and operating results  of
Metallurg, the parent holding  company,  for  the  three months ended April 30,
1998.

                                      7
<PAGE>

2.  INVENTORIES

Inventories, net of reserves, consist of the following (in thousands):



</TABLE>
<TABLE>
<CAPTION>
                                                             April 30,                  January 31,
                                                               1998                        1998
                                                          ----------------          -----------------
<S>                                                          <C>                        <C>
Raw materials ..........................................         $  30,496                  $  32,938
Work in process ........................................             2,075                      1,981
Finished goods .........................................            79,137                     77,473
Other ..................................................             4,866                      5,197
                                                          ----------------          -----------------
   Total ...............................................          $116,574                   $117,589
                                                          ================          =================
</TABLE>


3.  COMMITMENTS AND CONTINGENCIES

The Company continues defending various claims and legal actions arising in the
normal  course  of business, including those relating to environmental matters.
Management believes,  based  on the advice of counsel, that the outcome of such
litigation  will  not  have  a  material   adverse   effect  on  the  Company's
consolidated financial statements.

4.  EARNINGS PER COMMON SHARE

Earnings per share are calculated in accordance with SFAS  No.  128,  "Earnings
per  Share".  All diluted earnings per share amounts are computed on the  basis
of the  weighted  average  shares  of  common  stock  outstanding  plus  common
equivalent shares arising from the effect of dilutive stock options, using  the
treasury method.  The effect  of dilutive stock options issued on April 1, 1998
at a strike price of $8.43 per share was not material.  Earnings per share  for
periods  prior to  April 1, 1997 are  not  presented because such  presentation
would not be meaningful due to  fresh-start  reporting and the recapitalization
of the Company in connection with the Plan as of March 31, 1997.

                                      8
<PAGE>

5.  RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

The Company  adopted SFAS  No. 130,  "Reporting  Comprehensive  Income", as  of
February 1, 1998.  This  standard requires the display  of comprehensive income
and its components in the financial statements.

In  June  1997,  the  Financial  Accounting  Standards  Board  ("FASB")  issued
Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosure about
Segments of an Enterprise and Related  Information".  SFAS No. 131 requires the
reporting of profit and loss, specific revenue and expense items and assets for
reportable  segments.  It also requires the  reconciliation  of  total  segment
revenues, total  segment profit or loss, total segment assets and other amounts
disclosed for segments  to  the  corresponding  amounts  in the general purpose
financial  statements.   The  Company will adopt this standard  in  the  fourth
quarter of 1998.

In February 1998, the FASB issued  SFAS  No.  132, "Employer's Disclosure About
Pensions  and Other Postretirement Benefits".  SFAS  No.  132  changes  current
financial disclosure  requirements from those that were required under SFAS No.
87, Employers' Accounting  for  Pensions", SFAS No. 88, "Employers' Accounting
for  Settlement and Curtailments of  Defined  Benefit  Pension  Plans  and  for
Termination   Benefits"   and   SFAS   No.   106,  "Employers'  Accounting  for
Postretirement Benefits Other Than Pensions".   The  Company  will  adopt  this
standard in the fourth quarter of 1998.

6.  SUPPLEMENTAL GUARANTOR INFORMATION

In  November 1997, the Company sold $100 million principal amount of 11% senior
notes  due  2007  (the  "Senior  Notes").  Under the terms of the Senior Notes,
Shieldalloy, Metallurg Holdings Corporation,  Metallurg  Services, Inc. and MIR
(China),  Inc. (collectively, the "Guarantors"), wholly-owned  subsidiaries  of
the Company,  will  fully  and unconditionally guarantee on a joint and several
basis the Company's obligations to pay principal, premium and interest relative
to the Senior Notes.  Management  has  determined that separate, full financial
statements  of  the Guarantors would not be  material  and,  accordingly,  such
financial statements  are  not provided.  Supplemental financial information of
the Guarantors is presented below.

                                      9
<PAGE>

                 CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
                     FOR THE QUARTER ENDED APRIL 30, 1998
                                (In thousands)

<TABLE>
<CAPTION>
                                                    Combined          Combined
                                                    Guarantor        Non-Guarantor
                                 Metallurg, Inc.   Subsidiaries      Subsidiaries    Eliminations Consolidated
                                 ---------------   ------------     --------------   ------------ ------------
<S>                                 <C>               <C>                 <C>          <C>               <C>
Total revenue....................    $11,796        $55,547           $126,127        $(25,640)     $167,830
                                  ----------       ----------       -----------      ----------    ----------
Operating costs and expenses:
    Cost of sales................     10,331         45,603            108,214         (25,140)      139,008
    Selling, general and
      administrative expenses....      2,005          2,528             10,228             -          14,761
                                  ----------       ----------        ----------      ----------    ----------
Total operating costs and
      expenses...................     12,336         48,131            118,442         (25,140)      153,769
                                  ----------       ----------        ----------      ----------    ----------
Operating income (loss)..........       (540)         7,416              7,685            (500)       14,061
Other income (expense):
   Other income (expense), net..         878           -                  -               -             878
   Interest income (expense), net     (2,177)           238               (133)           -          (2,072)
   Equity in earnings of
      subsidiaries................     8,163          2,604               -            (10,767)          -
                                  ----------        ----------       ----------      ----------    ----------
Income before income
   tax provision..................     6,324         10,258              7,552         (11,267)      12,867
Income tax provision (benefit)....      (466)         3,166              3,377            -           6,077
                                  ----------        ----------       ----------      ----------    ----------
Net income........................   $ 6,790        $ 7,092            $ 4,175        $(11,267)     $ 6,790
                                  ==========        ==========       ==========      ==========    ==========
</TABLE>

            CONDENSED CONSOLIDATING STATEMENT OF COMPREHENSSIVE INCOME
                      FOR THE QUARTER ENDED APRIL 30, 1998
                             (In thousands)

<TABLE>
<CAPTION>
                                                   Combined          Combined
                                                   Guarantor         Non-Guarantor
                                 Metallurg, Inc.   Subsidiaries      Subsidiaries     Eliminations  Consolidated
                                 ---------------   ------------      --------------   ------------  ------------
<S>                                <C>               <C>               <C>               <C>               <C>

Net Income......................      $6,790            $7,092          $4,175          $(11,267)       $6,790

Other comprehensive income
  (loss):
  Foreign currency translation
    adjustment..................          76               440              76              (516)          76
                                   ----------        ---------        ---------         ---------     --------
Comprehensive income............      $6,866            $7,532           $4,251         $(11,783)      $6,866
                                   ==========        =========        =========         =========     ========
</TABLE>

                                      10
<PAGE>
            CONDENSED CONSOLIDATING BALANCE SHEET AT APRIL 30, 1998
                                (In thousands)

<TABLE>
<CAPTION>
                                                   Combined          Combined
                                                   Guarantor         Non-Guarantor
                                 Metallurg, Inc.   Subsidiaries      Subsidiaries     Eliminations  Consolidated
                                 ---------------   ------------      --------------   ------------  ------------
<S>                                <C>               <C>               <C>               <C>               <C>
ASSETS
Current assets:
   Cash and cash equivalents.....  $ 24,377         $ 3,402           $ 22,442                         $ 50,221
   Accounts and notes
      receivable, net............    32,597          46,178             75,016         $(62,964)         90,827
   Inventories...................     7,972          41,034             71,813           (4,245)        116,574
   Other assets..................     7,287             244              5,284              -            12,815
                                 ----------      ----------         ----------        ----------     ----------
      Total current assets.......    72,233          90,858            174,555          (67,209)        270,437
Investments - intergroup.........   100,338          54,039                -           (154,377)            -
Investments - other..............         -               -              3,152              -             3,152
Property, plant and
   equipment, net................     1,016           6,930             33,720              -            41,666
Other assets.....................     5,333               3             11,010             (929)         15,417
                                 ----------      ----------         ----------        ----------     ----------
      Total......................  $178,920        $151,830           $222,437        $(222,515)       $330,672
                                 ==========      ==========         ==========        ==========     ==========

LIABILITIES
Current liabilities:
   Short-term debt and current
     portion of long-term debt...                                     $  3,975                         $  3,975
   Trade payables................  $  2,402        $ 17,096             50,334         $(17,634)         52,198
   Accrued expenses..............     5,853           8,340             17,344               -           31,537
   Loans payable - intergroup....    19,098           4,815             33,602          (55,330)          2,185
   Other current liabilities.....         -           3,195              3,397               -            6,592
                                 ----------      ----------         ----------        ----------     ----------
     Total current liabilities...    27,353          33,446            108,652          (72,964)         96,487
                                 ----------      ----------         ----------        ----------     ----------
Long-term liabilities:
   Long-term debt................   100,000               -              2,722               -          102,722
   Accrued pension liabilities...       345           1,784             35,344               -           37,473
   Environmental liabilities, net         -          34,691              3,062               -           37,753
   Other liabilities.............     1,395               -              5,944             (929)          6,410
                                 ----------      ----------         ----------       ----------      ----------
      Total long-term liabilities   101,740          36,475             47,072             (929)        184,358
                                 ----------      ----------         ----------       ----------      ----------
      Total liabilities..........   129,093          69,921            155,724          (73,893)        280,845
                                 ----------      ----------         ----------       ----------      ==========

SHAREHOLDERS' EQUITY:
   Common stock outstanding......        50           1,227            80,358          (81,585)             50
   Additional paid-in capital....    41,399          90,867             1,104          (91,971)         41,399
   Accumulated other comprehensive
      income.....................       749           1,549            22,462          (24,011)            749
   Retained earnings (deficit)...     7,629         (11,734)          (37,211)          48,945           7,629
                                 ----------      ----------         ----------       ----------     ----------
   Shareholders' equity..........    49,827          81,909            66,713         (148,622)         49,827
                                 ----------      ----------         ----------       ----------     ----------
      Total......................  $178,920        $151,830          $222,437        $(222,515)       $330,672
                                 ==========      ==========         ==========       ==========     ==========
</TABLE>
                                      11
<PAGE>
                CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
                     FOR THE QUARTER ENDED APRIL 30, 1998
                                (In thousands)

<TABLE>
<CAPTION>
                                                                  Combined         Combined
                                                                  Guarantor        Non-Guarantor
                                              Metallurg, Inc.     Subsidiaries     Subsidiaries    Consolidated
                                              ---------------     ------------     ------------    ------------
<S>                                              <C>                <C>                <C>                 <C> 
Net Cash Flows from
  Operating Activities.........................  $ 5,168             $2,229          $ 3,647            $11,044
                                                ----------        ----------       ----------        ----------

Cash Flows from Investing Activities:
   Additions to property, plant and equipment..      (35)              (443)          (2,451)            (2,929)
   Proceeds from asset sales...................    1,122                 -                21              1,143
   Other, net..................................       19                  1           (1,801)            (1,781)
                                                ----------        ----------       ----------         ----------
Net cash provided by (used in) investing
   activities..................................    1,106               (442)          (4,231)            (3,567)
                                                ----------        ----------       ----------         ----------
Cash Flows from Financing Activities:
   Intergroup borrowings (repayments)..........    2,220                891           (3,111)              -
   Net short-term borrowings...................        -                  -              146                146
   Repayment of long-term debt.................        -                  -             (419)              (419)
                                                ----------        ----------       ----------         ----------
Net cash provided by (used in) financing
   activities..................................    2,220                891           (3,384)              (273)
                                                ----------        ----------       ----------         ----------
Effects of exchange rate changes on cash
   and cash equivalents........................        -                  -               14                14
                                                ----------        ----------       ----------         ----------
   
Net increase (decrease) in cash and cash
   equivalents.................................    8,494              2,678           (3,954)            7,218
Cash and cash equivalents -
   beginning of period.........................   15,883                724           26,396            43,003
                                                ----------        ----------        ----------       ----------
Cash and cash equivalents -
   end of period...............................  $24,377             $3,402          $22,442           $50,221
                                                ==========        ==========        ==========       ==========
</TABLE>

                                      12
<PAGE>

                METALLURG, INC.  AND CONSOLIDATED SUBSIDIARIES
   ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
                             RESULTS OF OPERATIONS


OVERVIEW

Effective  March  31,  1997,  the  Company  implemented  fresh-start  reporting
relating  to  its  emergence  from  bankruptcy.   Accordingly,  all  assets and
liabilities  were  restated  to  reflect  their respective fair values and  the
consolidated financial statements subsequent  to  that date include the related
amortization  of  credits  associated  with  the fair value  adjustments.   The
consolidated financial statements after that date  are those of a new reporting
entity and are not comparable to the pre-confirmation periods.

In  addition,  as  a result of Metallurg's change in its  fiscal  year  from  a
calendar year to January  31,  effective  as of April 1, 1997, the consolidated
operating results of the Company for the quarter  ending April 30, 1998 include
the results of Metallurg, Inc., the parent holding company, for the three month
period  ended  April  30,  1998 and the results of its  operating  subsidiaries
(whose fiscal years remain the  calendar year) for the three month period ended
March 31, 1998. The consolidated balance sheet data of the Company at April 30,
1998 reflect the financial position of Metallurg, Inc. at April 30, 1998 and of
the operating subsidiaries at March 31, 1998.

RESULTS OF OPERATIONS

TOTAL REVENUES
--------------
Total revenues for Metallurg and  its  subsidiaries  increased  by  7.9%,  from
$155.6  million  in  the  first  quarter of 1997 to $167.8 million in the first
quarter  of  1998.   Increased  volume  and  selling  prices  of  ferrovanadium
accounted  for  substantially  all  of   the  increase.  In addition, increased
revenues from sales  of ferrotitanium and low carbon ferrochrome, due primarily
to increased volume, more  than  offset a reduction  in sales of ferroboron and
polishing powders due primarily to increased price competition.


GROSS MARGINS
-------------
Gross margins  increased  from  $21.5  million  in the first quarter of 1997 to
$28.8  million  in  the  first  quarter  of  1998, an increase  of  33.9%,  due
principally   to  the  price  and  volume  increases   in   ferrovanadium   and
ferrotitanium  discussed  above.   In  aluminum  master  alloys  and  compacted
products, a slight  decrease  in volume was more than offset by improvements in
product mix and selling prices, which offset negative production variances. The
values of the Company's assets  were reduced pursuant to fresh-start reporting,
reducing depreciation expense in  the  quarter  ended  April  30, 1998 by  $0.3
million and increasing gross margins by an equal amount.


SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
--------------------------------------------
Selling,  general  and  administrative expenses ("SG&A") decreased  from  $15.0
million in the first quarter  of  1997 to $14.8 million in the first quarter of
1998, a decrease of 1.9%.  For the first quarter of 1997, SG&A represented 9.7%
of the Company's sales compared to  8.8%  for  the first quarter of 1998.  SG&A
was higher in 1997 due to increased bonus accruals  and  awards under the Stock
Award  and  Stock  Option  Plan  of Metallurg incurred in connection  with  the
consummation of the Plan and additional costs related to the audit of March 31,
1997 financial statements.

                                      13
<PAGE>

OPERATING INCOME
----------------
Operating income increased from $6.5  million  for  the  first  quarter 1997 to
$14.1  million  for  the  first  quarter  of 1998, an increase of 117.0%.   The
increase resulted from the improvement in gross  margins  and decrease in SG&A,
mentioned above.

INTEREST INCOME (EXPENSE), NET
------------------------------
Interest income (expense), net is as follows (in thousands):

                                              Quarter                 Quarter
                                               Ended                   Ended
                                              April 30,               March 31,
                                                1998                    1997
                                             ----------               ---------
Interest income..............................  $   828                $  1,461
Interest expense.............................   (2,900)                 (1,706)
                                             ----------               ---------
   Interest income (expense), net............  $(2,072)               $   (245)
                                             ==========               =========

Interest  expense  increased  significantly  in  1998.  In the first quarter of
1998, the Company accrued approximately $2.8 million  of  interest  expense  on
$100  million  aggregate  principal  amount of its 11% senior notes, which were
issued in November 1997.  The Company  used  a portion of the proceeds from the
11% notes to retire $39.5 million of outstanding  12% senior-secured notes.  In
the first quarter of 1997, the Company accrued approximately  $1.2  million  of
interest  expense  on  these  12% notes. The Company did not accrue interest on
debt  incurred  prior  to  entering  Chapter  11  proceedings.   As  a  result,
approximately  $2.1  million  of   contractual   interest  on  these  unsecured
obligations, which were reported as part of liabilities  subject to compromise,
was not reflected in the quarter ended March 31, 1997.


INCOME TAX PROVISION (BENEFIT):
------------------------------
Income tax provision, net of tax benefits, is as follows (in thousands):

                                              Quarter                 Quarter
                                               Ended                   Ended
                                              April 30,               March 31,
                                                1998                    1997
                                             ----------               ---------
Total current................................    $4,690                 $   704
Total deferred...............................     1,387                  (3,767)
                                             ----------               ---------
   Income tax provision (benefit), net.......    $6,077                 $(3,063)
                                             ==========               =========


The differences between the statutory Federal income tax rate and the Company's
effective  rate  result  primarily  because  of: (i) the  excess of foreign tax
rates  over  the  statutory Federal income tax rate;  (ii)  certain  deductible
temporary differences  which,  in  other  circumstances  would have generated a
deferred  tax  benefit, have been fully provided for in a valuation  allowance;
(iii) the deferred  tax  effects  of  certain tax assets, primarily foreign net
operating  losses,  for  which  the  benefit  had  been  previously  recognized
approximating $0.5 million in the quarter  ended  April  30, 1998; and (iv) the
deferred tax effects of certain deferred tax assets for which  a  corresponding
credit  has  been  recorded to "Additional paid-in capital" approximating  $0.9
million in the quarter  ended  April  30,  1998.   The  deferred  tax  expenses
referred  to in items (iii) and (iv) above will not result in cash payments  in
future periods.

                                      14
<PAGE>

NET INCOME
----------
Net income  was  $6.8  million  for the first quarter of 1998 compared to $58.0
million for the first quarter of  1997.  Included  in the 1997 net income is an
extraordinary  item  of  $43.0 million representing the  cancellation  of  debt
resulting from the consummation of the Company's Reorganization Plan and a $5.1
million credit representing  the  effects of revaluing the Company's assets and
liabilities under fresh-start reporting.  Reorganization expenses for the first
quarter  of 1997 were $2.7 million.   In  March  1998,  the  Company  sold  its
minority  investment   in  a  Luxembourg  affiliate  and  realized  a  gain  of
approximately $0.9 million.   In  the  first  quarter  of  1997,  other  income
included  a  $2.7  million  gain  on  the sale of the Company's New York office
building.

LIQUIDITY AND FINANCIAL RESOURCES

GENERAL
-------
The Company's sources of liquidity include  cash  from  operations  and amounts
available under credit facilities.  In addition, the Company has $50.2  million
of  cash and cash equivalents at April 30, 1998.  In November 1997, the Company
sold  $100  million principal amount of 11% senior notes due 2007, the proceeds
of which were  used  to  retire  the Company's then existing 12% senior-secured
notes (approximately $39.5 million),  repay  certain  debt of the UK and German
subsidiaries  (approximately  $19.8  million)  and  to  pay  a   cash  dividend
(approximately  $20.0 million).  The balance of the net proceeds will  be  used
for general corporate  purposes.   The  Company believes that these sources are
sufficient to fund the current and anticipated  future  requirements of working
capital,  capital  expenditures, pension benefits, potential  acquisitions  and
environmental expenditures through at least 1999.

At April 30, 1998, the  Company had $50.2 million in cash and cash  equivalents
and working capital of $174.0  million, as compared to $43.0 million and $167.8
million, respectively, at January 31, 1998.  For the first quarter of 1998, the
Company generated $11.0 million  in  cash from operations and received proceeds
of approximately $1.1 million on the sale  of its Luxembourg affiliate. Capital
expenditures approximated $2.9 million in the quarter and in February 1998, the
Company  purchased  an additional 5% interest  in  a  Russian  magnesium  metal
producer for approximately $2.0 million.


CREDIT FACILITIES AND OTHER FINANCING ARRANGEMENTS
--------------------------------------------------
The Company has a credit  facility  with  certain financial institutions led by
BankBoston,  N.A.  as agent (the "Revolving Credit  Facility")  which  provides
Metallurg, Shieldalloy  and  certain  of  their  subsidiaries  with up to $50.0
million of financing resources at a rate per annum equal to (i)  the  Alternate
Base  Rate  plus 1.0% per annum (the Alternate Base Rate is the greater of  the
Base Rate or  the  Federal  Funds Effective Rate plus 0.5%) or (ii) the reserve
adjusted Eurodollar rate plus  2.5%  for  interest periods of one, two or three
months.   The  Revolving Credit Facility permits  borrowings  of  up  to  $50.0
million for working  capital requirements and general corporate purposes, up to
$30.0 million of which  may be used for letters of credit in the U.S.  At April
30, 1998, there were no outstanding  loans  and  $29.3  million  of  letters of
credit outstanding in the U.S. under the Revolving Credit Facility.

In addition, several of the other foreign subsidiaries of Metallurg have credit
facility  arrangements  with  local  banking institutions to provide funds  for
working capital and general corporate  purposes.  These local credit facilities
contain restrictions which vary from company  to  company.   At April 30, 1998,
there  were  $2.9  million  of  outstanding  loans  under  these  local  credit
facilities.

                                      15
<PAGE>

CAPITAL EXPENDITURES

The  Company  invested  $2.9 million in capital expenditures during  the  first
quarter of 1998.  Capital  expenditures are expected to total approximately $20
million in 1998.  Although the  Company  has  budgeted these items in 1998, the
Company has not committed to complete these projects  which  are  contingent on
senior  management  approval  and other conditions.  The Company believes  that
these projects will be funded through  internally  generated  cash,  borrowings
under the Revolving Credit Facility and local credit lines.

ENVIRONMENTAL REMEDIATION COSTS

In 1996, the Company elected early  adoption of the AICPA Statement of Position
96-1,  "Environmental  Remediation  Liabilities",  which  among  other
requirements,  states  that losses associated  with  environmental  remediation
obligations are accrued when  such  losses are deemed  probable and  reasonably
estimable.  Such accruals generally are recognized no later than the completion
of the remedial  feasibility  study and are  adjusted  as  further  information
develops or circumstances change.  Costs of future expenditures for
environmental  remediation  obligations  are generally not  discounted to their
present value.  During  the first  quarter of 1998, the  Company  expended $0.6
million for environmental remediation.

As  part  of the Plan, Shieldalloy  entered  into  settlement  agreements  with
various  environmental  regulatory  authorities  with  regard  to  all  of  the
significant  environmental  remediation  liabilities  of  which  it  is  aware.
Pursuant  to  these agreements, Shieldalloy has agreed to perform environmental
remediation which, as of April 30, 1998, had an estimated cost of completion of
$39.4 million.   Of  this  amount, approximately $4.2 million is expected to be
expended in 1998, $4.3 million  in 1999 and $8.1 million in 2000.  In addition,
the Company estimates it will make expenditures of $5.0 million with respect to
environmental  remediation  at  its   foreign   facilities.   Of  this  amount,
approximately $1.8 million is expected to be expended  in 1998, $0.7 million in
1999 and $0.7 million in 2000.

                                      16
<PAGE>

PART II       OTHER INFORMATION


Item 6.(a)    EXHIBITS

              27 Financial Data Schedule


    6. (b)    REPORT ON FORM 8-K

              None

                                      17
<PAGE>

                                  SIGNATURES

Pursuant  to  the  requirements of the Securities Exchange  Act  of  1934,  the
registrant has duly  caused  this  report to be  signed  on June 9, 1998 on its
behalf by the undersigned thereunto duly authorized.


                                            METALLURG, INC.


                                            /s/  BARRY C. NUSS
                                            -----------------------------------
                                               Barry C. Nuss
                                               Chief Financial Officer
                                               (Principal Financial Officer and
                                               Principal Accounting Officer)

                                      18
<PAGE>