PURPOSE: To offer a low-price inductance element having superior over-all magnetic characteristics and low magnetic permeability-temperature coefficient.

CONSTITUTION: Firstly, an alloy consisting of silicon of 3W8%, alumiium of 2W 5%, nickel of 6% or less, iron as residual, and unavoidable impurities is melted in vacuum or in argon gas to form suitable shaped casting after casting. The casting is preserved for several hours at a temperature of 600W1,300°C to contrive the uniform crystallization of the alloy. Next, forging is done and a suitable billet is made while supplying the alloy with viscosity. Next, the billet is pulverized to form a circular or flattening particles with a stamp mill or a suitable lump breaker. If necessary, the very fine magnetic powder of ferrite having high magnetic permeability of 10% or less is added to the particles and is mixed with the suitable amount of a binding agent having superior electrical insulation. Next, the easy magnetization direction is agreed with the magnetization direction at the time of using a dust core by applying an external magnetic field. Finally, the mixed substance is compressed and molded, and the powder and the binding agent are sufficiently contacted by heating for several hours.