A composition for use with alloys including extra-fine nickel powder dispersed with a hydrophobic inorganic dispersant which is preferably high-purity silica treated with hexamethyldisilazane (fumed silica). The composition breaks and prevents the agglomeration of the nickel powder, thereby preventing weaknesses in alloys, like steel for example, formed with the nickel powder. A method for making an alloy with the composition includes mixing the nickel powder with other metals and/or nonmetals and the hydrophobic fumed silica to form an alloy blend, pressing the alloy blend, and sintering the alloy blend.