<PAGE>
 
                                                                   Exhibit 10.19



                 FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT
                 ----------------------------------------------
                                        

     THIS FIRST AMENDMENT TO LOAN AND SECURITY AGREEMENT (this "Amendment") is
made and entered into this 17th day of December, 1998, by and between GULF
STATES STEEL, INC. OF ALABAMA, an Alabama corporation ("Borrower"), and
successor-by-merger to Alabama Structural Beam Corp., with its chief executive
office and principal place of business at 174 South 26th Street, Gadsden,
Alabama 35904; and FLEET CAPITAL CORPORATION, a Rhode Island corporation with an
office at 200 Glastonbury Boulevard, Glastonbury, Connecticut 06033, in its
capacity as collateral and administrative agent for the Lenders pursuant to
Section 12 of the Loan Agreement (as hereinafter defined) (together with its
successors in such capacity, "Agent").


                                   Recitals:
                                   -------- 
                                        
     Agent, Lenders, Borrower and Alabama Structural Beam Corp., an Alabama
corporation ("ASB") entered into a certain Loan and Security Agreement dated
November 13, 1997 (as at any time amended, the "Loan Agreement"), pursuant to
which Lenders have made certain revolving credit loans and other financial
accommodations to Borrower and ASB.

     ASB has been merged with and into Borrower, with Borrower being the
surviving company after giving effect to such merger.

     The parties desire to amend the Loan Agreement to reflect the merger and
certain other changes set forth herein.

     NOW, THEREFORE, for TEN DOLLARS ($10.00) in hand paid and other good and
valuable consideration, the receipt and sufficiency of which are hereby
severally acknowledged, the parties hereto, intending to be legally bound
hereby, agree as follows:


     1.  Definitions. All capitalized terms used in this Amendment, unless
         -----------                                                      
otherwise defined herein, shall have the meaning ascribed to such terms in the
Loan Agreement.


     2.  Amendment to Loan Agreement. The Loan Agreement is hereby amended as
         ---------------------------                                         
follows:

         (a)   By inserting the following definitions of "Investment Property"
     and "Margin Stock" into Appendix A of the Loan Agreement in proper
                             ----------                                
     alphabetical sequence:


                     Investment Property - all securities (whether certificated
                     -------------------                                       
               or uncertificated), security entitlements, securities accounts,
               commodities contracts and commodity accounts.


                     Margin Stock - shall have the meaning ascribed to it in
                     ------------                                           
               Regulation U of the Board of Governors of the Federal Reserve
               System.
<PAGE>
 
          (b)   By deleting subsections (vii), (viii), (ix) and (x) of Section
6.1 of the Loan Agreement in their entirety and by substituting the following
new subsections in lieu thereof:


               (vii)    All Investment Property (but excluding any portion
          thereof that constitutes Margin Stock unless otherwise expressly
          provided in any Security Documents);


               (viii)   All monies now or at any time or times hereafter in the
          possession or under the control of Agent or a Lender or a bailee or
          Affiliate of Agent or a Lender, including any Cash Collateral in the
          Cash Collateral Account;


               (ix)     All accessions to, substitutions for and all
          replacements, products and cash and non-cash proceeds of (i) through
          (viii) above, including proceeds of unearned premiums with respect to
          insurance policies insuring any of the Collateral; and


               (x)      All books and records, including customer lists, files,
          correspondence, tapes, computer programs, print-outs, and other
          computer materials and records of Borrower pertaining to any of (i)
          through (ix) above.


          (c)    By inserting the following new Section 9.1.9 into the Loan
          Agreement:


               9.1.9   Year 2000 Compatibility. Take all action necessary to
                       -----------------------                              
          ensure that Borrower's computer-based systems are able to operate and
          effectively process data including dates on and after January 1, 2000.
          Borrower shall provide Agent written assurance acceptable to Agent
          that Borrower's systems are Year 2000 compliant on or before June 30,
          1999. Borrower shall promptly and in no event later than June 30,
          1999, take all action necessary to ensure that all computer-based
          systems of Borrower are capable of the following: (a) handling date
          information involving any and all dates before, during and/or after
          January 1, 2000, including accepting input, providing output and
          performing date calculations in whole or in part; (b) operating
          accurately without any interruption on and in respect of any and all
          dates before, during and/or after January 1, 2000, and without any
          change in performance; (c) responding to and processing two digit year
          input without creating any ambiguity as to the century; and (d)
          storing and providing date input information without creating any
          ambiguity as to the century. In addition, at the request of Agent,
          Borrower shall provide Agent assurances in form and substance
          reasonably satisfactory to Agent of Borrower's Year 2000
          compatibility.


          (d)    By deleting Section 9.3 of the Loan Agreement in its entirety
     and by substituting the following new Section 9.3 in lieu thereof:


                                       2
<PAGE>
 
               9.3.    Specific Financial Covenant. For so long as there are any
                       ---------------------------                              
          Commitments outstanding and thereafter until payment in full of the
          Obligations, Borrower covenants that, unless otherwise consented to by
          the Required Lenders in writing, it shall maintain Consolidated
          Adjusted Tangible Net Worth at all times greater than ($20,000,000).


     3.   Ratification and Reaffirmation. Borrower hereby ratifies and reaffirms
          ------------------------------                                        
each of the Loan Documents and all of Borrower's covenants, duties, indebtedness
and liabilities thereunder.  Borrower agrees that any and all duties,
indebtedness and liabilities of ASB under the Loan Agreement and the other Loan
Documents have been assumed by Borrower and Borrower hereby ratifies and
reaffirms all such duties, indebtedness and liabilities thereunder. For purposes
of the Loan Agreement and each of the other Loan Documents, any and all
references to "Borrowers" or "each Borrower" shall be deemed to mean Gulf States
Steel, Inc. of Alabama.


     4.   Acknowledgments and Stipulations. Borrower acknowledges and stipulates
          --------------------------------                                      
that the Loan Agreement and the other Loan Documents executed by Borrower are
legal, valid and binding obligations of Borrower that are enforceable against
Borrower in accordance with the terms thereof; all of the Obligations are owing
and payable without defense, offset or counterclaim (and to the extent there
exists any such defense, offset or counterclaim on the date hereof, the same is
hereby waived by Borrower); the security interests and liens granted by Borrower
in favor of Agent are duly perfected, first priority security interests and
liens; and the unpaid principal amount of the Loans on and as of December 17,
1998, totaled $47,105,978.60.


     5.   Representations and Warranties. Borrower represents and warrants to
          ------------------------------                                     
Agent, to induce Agent to enter into this Amendment, that no Default or Event of
Default exists on the date hereof; the execution, delivery and performance of
this Amendment have been duly authorized by all requisite corporate action on
the part of Borrower and this Amendment has been duly executed and delivered by
Borrower; and except as may have been disclosed in writing by Borrower to Agent
prior to the date hereof; all of the representations and warranties made by
Borrower in the Loan Agreement are true and correct on and as of the date hereof


     6.   Expenses of Agent. Borrower agrees to pay, on demand, all costs and
          -----------------                                                  
expenses incurred by Agent in connection with the preparation, negotiation and
execution of this Amendment and any other Loan Documents executed pursuant
hereto and any and all amendments, modifications, and supplements thereto,
including, without limitation, the costs and fees of Agent's legal counsel and
any taxes or expenses associated with or incurred in connection with any
instrument or agreement referred to herein or contemplated hereby.


     7.   Effectiveness: Governing Law. This Amendment shall be effective upon
          ----------------------------                                        
acceptance by Agent (notice of which acceptance is hereby waived), whereupon the
same shall be governed by and construed in accordance with the internal laws of
the State of Connecticut.


     8.   Successors and Assigns. This Amendment shall be binding upon and inure
          ----------------------                                                
to the benefit of the parties hereto and their respective successors and
assigns.


                                       3
<PAGE>
 
     9.   No Novation. etc.. Except as otherwise expressly provided in this
          -----------------                                                
Amendment, nothing herein shall be deemed to amend or modify any provision of
the Loan Agreement or any of the other Loan Documents, each of which shall
remain in full force and effect. This Amendment is not intended to be, nor shall
it be construed to create, a novation or accord and satisfaction, and the Loan
Agreement as herein modified shall continue in full force and effect.


     10.  Counterparts: Telecopied Signatures. This Amendment may be executed in
          -----------------------------------                                   
any number of counterparts and by different parties to this Agreement on
separate counterparts, each of which, when so executed, shall be deemed an
original, but all such counterparts shall constitute one and the same agreement.
Any signature delivered by a party by facsimile transmission shall be deemed to
be an original signature hereto.


     11.  Further Assurances. Borrower agrees to take such further actions as
          ------------------                                                 
Agent shall reasonably request from time to time in connection herewith to
evidence or give effect to the amendments set forth herein or any of the
transactions contemplated hereby.


     12.  Section Titles. Section titles and references used in this Amendment
          --------------                                                      
shall be without substantive meaning or content of any kind whatsoever and are
not a part of the agreements among the parties hereto.


     13.  Release of Claims. To induce Agent to enter into this Amendment,
          -----------------                                               
Borrower hereby releases, acquits and forever discharges Agent, and all
officers, directors, agents, employees, successors and assigns of Agent, from
any and all liabilities, claims, demands, actions or causes of action of any
kind or nature (if there be any), whether absolute or contingent, disputed or
undisputed, at law or in equity, or known or unknown, that Borrower now has or
ever had against Agent arising under or in connection with any of the Loan
Documents or otherwise, except for claims arising from Agent's or any Lender's
gross negligence or wilful misconduct and except that this paragraph shall not
be deemed to release Agent or any Lender from their respective obligations under
the Loan Documents.


     14.  Waiver of Jury Trial. To the fullest extent permitted by Applicable
          --------------------                                               
Law, the parties hereto each hereby waives the right to trial by jury in any
action, suit, counterclaim or proceeding arising out of or related to this
Amendment.


                                       4
<PAGE>
 
     IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed under seal, and delivered by their respective duly authorized
officers on the date first written above.


                              BORROWER:
                              -------- 

                              GULF STATES STEEL, INC.
                              OF ALABAMA


                              By:  /s/ Jeffrey S. Stein
                                   -------------------------------------
                                 Jeffrey S. Stein, Vice President and
                                 Assistant Secretary

                              LENDERS:
                              ------- 

                              FLEET CAPITAL CORPORATION

                              By:  /s/ Robert Daley
                                   -------------------------------------
                                 Robert Daley, Vice President

                              LENDERS:
                              ------- 

                              FLEET CAPITAL CORPORATION

                              By:  /s/ Robert Daley
                                   -------------------------------------
                                 Title:  Vice President
                                         -------------------------------

                              CONGRESS FINANCIAL CORPORATION

                              By:  /s/ John Husson
                                   -------------------------------------
                                 Title:  Vice President
                                         -------------------------------

                              AGENT:
                              ----- 

                              FLEET CAPITAL CORPORATION
                              ("Agent")

                              By:  /s/ Robert Daley
                                   -------------------------------------
                                 Title:  Vice President
                                         -------------------------------

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