In alumina and especially chromia forming alloys containing RE's in form of oxide dispersions the size and distribution of the RE is of equal importance for obtaining optimum oxidation properties as the actual type (Y2O3, La2O3, CeO2) and/or exact amount (0.1-1 wt.-%) of the dispersion. In conventional cast or wrought alloys the effective distribution of the RE will strongly depend on the form in which it prevails in the alloy, e.g. dissolved or in form of an intermetallic compound. The mechanism of RE incorporation into the surface scale can be affected by presence of other reactive minor alloying elements, such as Ti, Common alloy impurities such as C and/or N, if present in sufficiently high amounts, lead to formation of RE-carbo/nitride precipitates which become embedded in the growing oxide scale. Oxidation of the embedded precipitates upon long term exposure leads to microcracking and subsequent increased oxidation rates.