PURPOSE: To realize uniform and fine crystalline grain size, to reduce cracks and to improve the durability by adding a small amount of silicon Si to pure Zr containing iron of concentration lower than the solubility of the zirconium Zr.

CONSTITUTION: In the case of forming an electrode used for vacuum arc melting to manufacture an ingot of considerably pure Zr containing iron of concentration lower than the solubility of Zr, i.e., about 250 to 300ppm, Si of about 40 to 120ppm is added to Zr molding to form crystal grain size to uniform and small size. The concentration of the Si to be added is optimally about 60 to 90ppm. A log-like ingot of unalloyed Zr is bored, a billet is extruded to be molded in a tube, cut in a suitable length, engaged with the central hole of zircalloy billet and welded to one another. Then, it is simultaneously extruded, molded in a diaphragm tube shell, annealed, and cold-worked to obtain a fuel coating of final size. The homogeneous and fine particle size material is improved in moldability and particularly effective in molding of a sheet component.