High velocity compaction is a production technique with capacity to significantly improve the mechanical properties of powder metallurgy (PM) parts. The dynamic testing is performed using a modified split Hopkinson pressure bar (SHPB). A specimen is placed between two elastic bars. The impact loading is achieved by a projectile accelerating inside an air gun, which impacts the end of an input bar creating elastic wave propagation. This process is modelled and simulated by using finite element method. The stress and strain history in the specimen during impact are compared with the evaluated experimental values from the strain measured on the input and output bars. The powder material used for the experiments was a press-ready premix containing Distaloy AE, 0.5% graphite and 0.6% Kenolube. In order to model the impact process a constitutive relation describing the powder behaviour taking into account the strain-rate and density variations are proposed. In conclusion, the proposed material model captures the increase in yield stress due to higher strain rates.