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                                 PRESS RELEASE

Date:     July 1, 1999
Contact:  Robert Schaal, Gulf States Steel, Inc. (256/543-6105)


               GULF STATES STEEL FILES FOR BANKRUPTCY PROTECTION
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Gulf States Steel, Inc. of Alabama, an integrated steel producer of plate, hot
roll, cold roll and galvanize flat rolled products in Gadsden, Alabama, has
filed a voluntary petition under Chapter 11 of the United States bankruptcy
code. The Chapter 11 filing will enable the Company to conduct its activities as
usual while completing its operational and financial restructuring.  Robert
Schaal, Chairman and CEO, stated that the Company would be able to continue to
operate uninterrupted through the period of reorganization thanks to an
aggregate post-petition credit availability of about $100 million for which the
Company is seeking court approval.  This credit is available due to the
continued confidence of the pre-petition creditors, Fleet Capital Corporation
and Congress Financial Corporation, as well as new facilities provided by a new
term lender and trade vendors under a preferred supplier credit program.  A
committee representing note holders of the Company's 13 1/2% Series B First
Mortgage Notes due 2003 has, subject to court approval, consented to the $32
million of new facilities being secured by liens which are senior to the
existing liens on the First Mortgage Notes.

Mr. Schaal said "We regret having to file this petition just as we regret the
illegal dumping of foreign steel that has forced us into this situation.
However, the additional financing will allow us to implement a reorganization
plan that has as its goals the restructuring of debt, installation of key
capital improvements, and overall reorganization of cost structure and financial
affairs.  The successful implementation of this plan will make Gulf States Steel
a strong participant in the flat rolled steel market in the Southeast.  Current
management will operate the Company with the goal of providing our customers
with the best service in the industry.  I am confident that Gulf States Steel
will emerge as a better-capitalized, lower cost, profitable company that will
provide real value to both our customers and our community."

This press release contains forward-looking statements made pursuant to the
"safe harbor" provisions of the federal securities law.  Investors are cautioned
that such forward-looking statements are not guarantees of future performance,
involve risks and uncertainties, and that actual results may differ materially
from those contemplated by such forward-looking statements.  Important factors
known to management that could cause actual results to differ materially from
those contemplated by the forward-looking statements in this press release
include, but are not limited to, the overall demand for steel, the ability to
maintain sales prices, productivity improvement programs, increases in the costs
of ferrous scrap, increases in pension costs, increases in other materials and
costs of production, increases in financing costs, labor relations, increased
domestic or foreign steel competition, adverse developments arising from the
Chapter 11 proceedings and adverse developments in the timing or results of the
Company's current business plan.  Additional factors that would cause actual
results to differ materially from those contemplated in this press release can
be found in the Company's Securities and Exchange Commission reports on Form
10-Q for the quarter ended April 30, 1999 and the related Form 10-Q/A for such
period, and on Form 10-K for the fiscal year ended October 31, 1998.  Detailed
information on all the Company's periodic report filings may be found on the SEC
EDGAR electronic filing database.