FORM 10-Q


	SECURITIES AND EXCHANGE COMMISSION
	Washington, D.C.  20549


(Mark One)
  X    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE    
       SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended         March 28, 1998             

	OR

       TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE   
       SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________.

	Commission File No.  0-22416 

	KENTUCKY ELECTRIC STEEL, INC.
	(Exact name of Registrant as specified in its charter)

        Delaware                                    61-1244541  
(State or other jurisdiction of                 (I.R.S. Employer  
incorporation or organization)                   Identification 
                                                    Number)

	   P. O. Box 3500, Ashland, Kentucky 41105-3500  
	(Address of principal executive office, Zip Code)

	                (606) 929-1222                   


Indicate by check mark whether the registrant (1) has filed all 
reports required to be filed by Section 13 or 15(d) of the Securities 
Exchange Act of 1934 during the preceding 12 months (or for such 
shorter period that the registrant was required to file such 
reports), and (2) has been subject to such filing requirements for 
the past 90 days.


	YES    x         NO       

The number of shares outstanding of each of the issuer's classes of 
common stock, as of May 11, 1998, is as follows:				
	

4,626,561 shares of voting common stock, par value $.01 per 
share.




	KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY


	TABLE OF CONTENTS


                                                            Page

PART I.  FINANCIAL INFORMATION 

 Item 1 - Financial Statements 

    Condensed Consolidated Balance Sheets..................    3
           
    Condensed Consolidated Statements of Operations .......    4
         
    Condensed Consolidated Statements of Cash Flows .......    5
          
    Notes to Condensed Consolidated Financial Statements ..  6-8  
      

 Item 2 - Management's Discussion and Analysis of Financial
            Condition and Results of Operations ........... 9-11


PART II.    OTHER INFORMATION 

 Item 6 - Exhibits and Reports on Form 8-K ................   12


            SIGNATURES  ...................................   13


<PAGE>


<TABLE


KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
(Unaudited)
                                                        Mar. 28,    Sept. 27,
                                                          1998         1997   
   [S]                                                  [C]         [C]         
                ASSETS
   CURRENT ASSETS
     Cash and cash equivalents                          $    128    $    127
     Accounts receivable, less allowance for doubtful
       accounts and claims of $565 at March 28, 1998   
       and $470 at September 27, 1997                     14,999      11,577
     Insurance claim receivable                              900         900
     Inventories                                          19,036      16,538
     Operating supplies and other current assets           5,492       4,802
     Refundable income taxes                                -            900
     Deferred tax assets                                     552         457

       Total current assets                               41,107      35,301

   PROPERTY, PLANT AND EQUIPMENT
     Land and buildings                                    4,498       4,448
     Machinery and equipment                              41,047      40,301
     Construction in progress                              3,069       2,012
     Less - accumulated depreciation                     (12,978)    (11,229)
                                                                 
          Net property, plant and equipment               35,636      35,532

   DEFERRED TAX ASSETS                                     6,472       7,159

   OTHER ASSETS                                              984         778

          Total assets                                  $ 84,199    $ 78,770

        LIABILITIES AND SHAREHOLDERS' EQUITY
   CURRENT LIABILITIES
     Advances on line of credit                         $ 15,393    $ 10,635
     Accounts payable                                      7,762       7,977
     Capital expenditures payable                            911         547
     Accrued liabilities                                   3,445       3,700
     Environmental liabilities                               982         982
     Current portion of long-term debt                       125         125

          Total current liabilities                       28,618      23,966
                                                          
   LONG-TERM DEBT                                         20,000      20,000
                                                              
   OTHER LIABILITIES                                         701         593

          Total liabilities                               49,319      44,559
                                     
   SHAREHOLDERS' EQUITY
     Preferred stock, $.01 par value, 1,000,000
       shares authorized, no shares issued                  -           -
     Common stock, $.01 par value, 15,000,000       
       shares authorized, 4,981,105 and 4,977,988                          
       share issued, respectively                             50          50
     Additional paid-in capital                           15,686      15,665
     Less treasury stock - 354,544 and 350,976    
       shares at cost, respectively                       (2,663)     (2,638)
     Deferred compensation                                  (101)       (170)
     Retained earnings                                    21,908      21,304

          Total shareholders' equity                      34,880      34,211

          Total liabilities and shareholders' equity    $ 84,199    $ 78,770
[FN]
See notes to condensed consolidated financial statement


<TABLE>	
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in Thousands, Except Per Share Data)
(Unaudited)


                                   Three Months Ended      Six Months Ended  
                                   Mar. 28,   Mar. 29,    Mar. 28,   Mar. 29,
                                     1998       1997        1998       1997                
             
<S>                                <C>                    <C>  
NET SALES                        $  29,610   $  23,159   $ 55,630   $ 46,541 
COST OF GOODS SOLD                  26,187      23,615     49,867     47,011  

  Gross profit (loss)                3,423        (456)     5,763       (470)
 
SELLING AND ADMINISTRATIVE EXPENSES  1,901       1,658      3,589      3,383  
                             
  Operating income (loss)            1,522      (2,114)     2,174     (3,853) 

INTEREST INCOME AND OTHER               14           6         24         11 
INTEREST EXPENSE                      (627)       (554)    (1,222)    (1,048)

  Income (loss) before 
     income taxes                      909      (2,662)       976     (4,890) 
                                
PROVISION (CREDIT) FOR INCOME TAXES    346      (1,003)       372     (1,847)

  Net income (loss)               $    563    $ (1,659)  $    604   $ (3,043)
                          
NET INCOME (LOSS) PER COMMON 
  SHARE - BASIC AND DILUTED       $    .12    $   (.36)  $    .13   $   (.66)

WEIGHTED AVERAGE SHARES 
  OUTSTANDING - BASIC            4,626,033   4,626,639  4,626,208  4,643,258

WEIGHTED AVERAGE SHARES 
  OUTSTANDING - DILUTED          4,630,520   4,626,639  4,631,502  4,643,258

<FN>
See notes to condensed consolidated financial statements

</TABLE>
<TABLE>
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
           
                                                       Six Months Ended                    
                                               Mar. 28,       Mar. 29,
                                                      1998           1997   
<S>                                                 <C>            <C>    
Cash Flows From Operating Activities:
  Net income (loss)                                 $    604       $ (3,043)
  Adjustments to reconcile net income (loss) to 
    net cash flows from operating activities:
      Depreciation and amortization                    1,832          1,821
      Change in deferred taxes                           687         (1,417)
      Change in other                                   (113)           (88)
      Change in current assets and current
        liabilities:
          Accounts receivable                         (3,422)           927 
          Inventories                                 (2,498)         2,210  
          Operating supplies and other                             
            current assets                              (690)          (977)
          Refundable income taxes                        900           (411)
          Deferred tax assets                            (95)           371
          Accounts payable                              (215)         2,069 
          Accrued liabilities                           (255)          (347)  

          Net cash flows from operating activities    (3,265)         1,115

Cash Flows From Investing Activities:
  Capital expenditures                                (1,852)        (1,728)
  Change in capital expenditures payable                 364         (1,498)

          Net cash flows from investing activities    (1,488)        (3,226)

Cash Flows From Financing Activities:
  Net advances on line of credit                       4,758          2,574 
  Purchases of treasury stock                            (25)          (463)
  Issuance of common stock                                21           -    

          Net cash flows from financing activities     4,754          2,111

          Net increase in cash and             
            cash equivalents                               1           -    

Cash and Cash Equivalents at Beginning of Period         127            124

Cash and Cash Equivalents at End of Period          $    128       $    124

Interest Paid, net of amount capitalized            $  1,194       $  1,050

Income Taxes Paid                                   $   -          $   -    

<FN>
   
            See notes to condensed consolidated financial statements
</TABLE>
<TEXT

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY

(1)  Basis of Presentation

The accompanying unaudited condensed consolidated 
financial statements represent Kentucky Electric Steel, Inc. 
and its wholly-owned subsidiary, KESI Finance Company, (the 
Company).  KESI Finance Company was formed in October 1996 to 
finance the Ladle Metallurgy Project.  All significant 
intercompany accounts and transactions have been eliminated. 
These statements have been prepared in accordance with 
generally accepted accounting principles for interim financial 
information and the instructions to Form 10-Q and Article 10 of 
Regulation S-X.  Accordingly, they do not include all of the 
information and footnotes required by generally accepted 
accounting principles for complete financial statements.  In 
the opinion of management, all adjustments (consisting of 
normal recurring adjustments) considered necessary for a fair 
presentation have been included.  Operating results for the 
six-month period ended March 28, 1998, are not necessarily 
indicative of the results that may be expected for the year 
ending September 26, 1998.  For further information, refer to 
the financial statements and footnotes thereto included in the 
Company's annual report on Form 10-K for the year ended 
September 27, 1997.

(2)  Accounting Policies

     Fiscal Year End
The Company's fiscal year ends on the last Saturday of 
September.  
     
     Property, Plant, Equipment and Depreciation
     Property, plant and equipment is recorded at cost, less 
accumulated depreciation. For financial reporting purposes, 
depreciation is provided on the straight-line method over the 
estimated useful lives of the assets, generally 3 to 12 years 
for machinery and equipment and 15 to 30 years for buildings 
and improvements.  Depreciation for income tax purposes is 
computed using accelerated methods.  Expenditures for 
maintenance and repairs are charged to expense as incurred.  
Expenditures for equipment renewals which extend the useful 
life of any asset are capitalized.  

The Company capitalizes interest costs as part of the 
historical cost of constructing major capital assets.  Interest 
cost of $3,000 and $11,000 were capitalized for the quarter and 
the six months ended March 29, 1997. 
No interest was capitalized for the quarter and six months 
ended March 28, 1998.


(3)  Inventories

	Inventories at March 28, 1998 and September 27, 1997 
consist of the following ($000's): 
                                        Mar. 28,    Sept. 27, 
                                     1998         1997  
      Raw materials                    $  2,522      $ 3,280 
      Semi-finished and finished goods   16,514       13,258
           Total inventories              $ 19,036     $ 16,538 



(4)	Earnings Per Share

		Statement of Financial Accounting Standards No. 128 (SFAS 
No. 128) related to earnings per share requires dual 
presentation of basic and diluted E.P.S. on the face of the 
income statement for all entities with complex capital 
structures.  The Company adopted SFAS No. 128 during the first 
quarter of fiscal 1998. The following is the reconciliation of 
the numerators and denominators of the basic and diluted 
earnings per share computations.

<TABLE>
           
                                For the Three                   For the Three
                              Months Ended                    Months Ended  
                            March 28, 1998                   March 29, 1997         
                                            Per                               Per
                      Income               Share       Income                Share 
                      (Loss)     Shares    Amount      (Loss)     Shares     Amount
<S>                   <C>                              <C>
Amounts for Basic        
  Earnings Per Share    $563    4,626,033    $.12      $(1,659)   4,626,639   $(.36)

Effect of Dilutive 
  Securities Options      -         4,487      -          -            -         -  
    
Amounts for Diluted       
  Earnings Per Share    $563    4,630,520    $.12      $(1,659)   4,626,639   $(.36)


                             For the Six                    For the Six
                             Months Ended                    Months Ended  
                            March 28, 1998                   March 29, 1997         
                                           Per                               Per
                     Income               Share       Income                Share 
                     (Loss)     Shares    Amount      (Loss)     Shares     Amount

Amounts for Basic       
  Earnings Per Share    $604    4,626,208    $.13      $(3,043)   4,643,258   $(.66)

Effect of Dilutive 
  Securities Options      -         5,294      -          -            -         -  
  
Amounts for Diluted
  Earnings Per Share    $604    4,631,502    $.13      $(3,043)   4,643,258   $(.66)
   </TABLE>

		The Company had transition stock options of 141,081 and 
163,329 as of March 28, 1998 and March 29, 1997, respectively. 
 The options have exercise prices ranging from $8.76 to $20.86 
per share which exceeded the average market price as of March 
28, 1998 and as of March 29, 1997, and therefore were not 
included in the computation of diluted earnings per share.  
These options expire beginning July 14, 1998 through February 
18, 2003.

		The Company also had options of 305,476 and 327,976 as of 
March 28, 1998 and March 29, 1997, respectively.  These options 
have exercise prices ranging from $7.63 to $12.31 per share 
which exceeded the average market price as of March 28, 1998 
and March 29, 1997 and therefore were not included in the 
computation of diluted earnings per share.  These options 
expire beginning October 6, 2003 through May 8, 2006.  The 
Company also had 89,192 options at an exercise price of $5.62, 
which were less than the average market price as of March 29, 
1997, however, these options are anti-dilutive and were not 
included in the computation of earnings per share.

(5)  Insurance Claim Receivable and Environmental Liabilities

The Company's melt shop operations were shut down for 
twelve days during the third quarter of fiscal 1997 in order to 
decontaminate its baghouse facilities after detection of a 
radioactive substance in the baghouse dust, a by-product of the 
melting process. The financial statements include a receivable 
of $.9 million which represents the estimated balance due from 
the insurance carrier on the total projected reimbursement of 
$6.7 million, which reimburses the costs incurred in the 
radiation contamination clean-up, the disposal cost, and 
business interruption.  To date, the Company has received $5.8 
million from the insurance carrier for payment of costs 
incurred.

The $1.0 million in environmental liabilities recorded as 
a current liability on the balance sheet represents final 
payment due an environmental services company for treatment and 
disposal of the contaminated baghouse dust. Payment for the 
disposal will occur within the next twelve months.  Although it 
is possible that the ultimate disposal costs may change from 
current estimates, the effect of the change, if any, is not 
expected to be material to the financial statements due to the 
Company having applicable insurance coverage.


(6)  Commitments and Contingencies

The Company has various commitments for the purchase of 
materials, supplies and energy arising in the ordinary course 
of business.

The Company is subject to various claims, lawsuits and 
administrative proceedings arising in the ordinary course of 
business with respect to commercial, product liability and 
other matters, which seek remedies or damages. The Company 
believes that any liability that may ultimately be determined 
will not have a material effect on its financial position or 
results of operations.

The Company generates both hazardous wastes and non-
hazardous wastes which are subject to various governmental 
regulations.  Estimated costs to be incurred in connection with 
environmental matters are accrued when the prospect of 
incurring costs for testing or remedial action is deemed 
probable.  The Company is not aware of any material asserted or 
unasserted environmental claims against the Company and no 
accruals for such matters have been recorded in the 
accompanying balance sheets except as disclosed in Note 5.  
However, discovery of unknown conditions could result in the 
recording of accruals in the periods in which they become 
known.

<PAGE


KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


General.  The Company manufactures special bar quality 
alloy and carbon steel bar flats to precise customer 
specifications for sale in a variety of niche markets.  Its 
primary markets are manufacturers of leaf-spring suspensions 
and flat bed truck trailers, cold drawn bar converters, and 
steel service centers.

Net Sales.  Net sales increased $6.5 million ( 27.9%) in 
the second quarter of fiscal 1998 to $29.6 million, as compared 
to $23.1 million for the second quarter of fiscal 1997. Net 
sales for the six months ended March 28, 1998 increased $9.1 
million (19.5%) to $55.6 million, as compared to $46.5 million 
for the six months ended March 29, 1997. The increase in sales 
is attributed to an increase in shipments and an increase in 
average selling price. Tons shipped increased 18.6% in the 
second quarter of fiscal 1998 as compared to the second quarter 
of fiscal 1997. Tons shipped for the six months ended March 28, 
1998 increased 12.3% as compared to the six months ended March 
29, 1997.The increase in shipments resulted from the continued 
strong demand for the Company's products and the increase in 
available inventory due to improvements in productivity. The 
increase in average selling price is attributed to the price 
increases implemented on many products primarily in the third 
quarter of fiscal 1997 and first and second quarters of fiscal 
1998.

Cost of Goods Sold.  Cost of  goods  sold increased $2.6 
million (10.9%) in the second quarter of fiscal 1998 to $26.2 
million, as compared to $23.6 million for the second quarter of 
fiscal 1997.  As a percentage of net sales, cost of goods sold 
decreased from  102.0% for the second quarter of fiscal 1997 to 
 88.4% for the second quarter of fiscal 1998. Cost of goods 
sold for the six months ended March 28, 1998 increased $2.9 
million (6.1%) to $49.9 million as compared to $47.0 million 
for the six months ended March 29, 1997. As a percentage of net 
sales, cost of goods sold decreased from 101.0% for the six 
months ended March 29, 1997 to 89.6% for the six months ended 
March 28, 1998. The increase in cost of goods sold reflects the 
increase in shipments offset by a decrease in the per ton cost 
of tons shipped.  The decrease in the per ton cost of tons 
shipped resulted from the lower conversion costs due to 
continued improvements in productivity from our capital 
projects, during the second quarter and first six months of 
fiscal 1998 as compared to the second quarter and first six 
months of fiscal 1997, offset somewhat by an increase in scrap 
costs.  

Gross Profit (Loss).  As a result of the above, the second 
quarter of fiscal 1998 reflected a gross profit of $3.4 million 
as compared to a loss of $.5 million for the second quarter of 
fiscal 1997.  As a percentage of net sales, gross profit 
increased from (2.0%) for the second quarter of fiscal 1997 to 
11.6% for the second quarter of fiscal 1998.  

		Similarly, the six months ended March 28, 1998 reflected 
a gross profit of $5.8 million as compared to a loss of $.5 
million for the six months ended March 29, 1997. As a 
percentage of net sales, gross profit increased from (1.0%) for 
the first six months of fiscal 1997 to 10.4% for the first six 
months of fiscal 1998.

Selling and Administrative Expenses.  Selling and 
administrative expenses include salaries and benefits, 
corporate overhead, insurance, sales commissions and other 
expenses incurred in the executive, sales and 
marketing, shipping, personnel, and other administrative 
departments. Selling and administrative expenses increased by 
approximately $243,000 and $206,000 for the three months and 
six months ended March 28, 1998, as compared to the same 
periods in fiscal 1997.  The increase in selling and 
administrative expenses primarily in the second quarter is due 
to an increase in personnel costs including workmen's 
compensation and health benefits, and an increase in legal 
fees.  As a percentage of net sales, such expenses decreased 
from 7.2% for the second quarter of fiscal 1997 to 6.4% for the 
second quarter of fiscal 1998. As a percentage of net sales, 
such expenses decreased from 7.3% for the six months ended 
March 29, 1997 to 6.5% for the six months ended March 28, 1998. 
 The decrease, as a percentage of sales, is primarily the 
result of an increase in net sales (as discussed above) for the 
quarter and six months ended March 28, 1998. 

Operating Income (Loss).  For the reasons described above, 
the second quarter of fiscal 1998 reflected operating income of 
$1.5 million as compared to an operating loss of $2.1 million 
for the second quarter of fiscal 1997. As a percentage of net 
sales, operating income (loss) increased from (9.1%) in the 
second quarter of 1997 to 5.1% in the second quarter of 1998.


		Similarly, the six months ended March 28, 1998 reflected 
an operating income of $2.2 million as compared to an operating 
loss of $3.9 million for the six months ended March 29, 1997. 
As a percentage of net sales, operating income (loss) increased 
from (8.3%) for the six months ended March 29, 1997 to 3.9% for 
the six months ended March 28, 1998.

Interest Expense.  Interest expense increased by $73,000 
for the three months ended March 28, 1998 from $554,000 for the 
second quarter of fiscal 1997 to $627,000 for the second 
quarter of fiscal 1998. Interest expense increased by $174,000 
for the six months ended March 28, 1998 from $1.0 million for 
the six months ended March 29, 1997 to $1.2 million for the six 
months ended March 28, 1998.  The increase is the result of 
additional borrowings on the Company's line of credit.  

Net Income (Loss).  As a result of the above, the second 
quarter of fiscal 1998 reflected net income of $.6 million as 
compared to a net loss of $1.7 million for the second quarter 
of fiscal 1997. 

Similarly, the six months ended March 28, 1998 reflected 
net income of $.6 million as compared to a net loss of $3.0 
million for the six months ended March 29, 1997.

Liquidity and Capital Resources

	The cash flows used by operating activities were $3.3 million 
for the first six months of fiscal 1998 as compared to cash 
flows provided of $1.1 million for the first six months of 
fiscal 1997. The first six months of fiscal 1998 operating cash 
flows reflect the increases in accounts receivable and 
inventories (due primarily to the increased level of sales and 
production). The cash flows provided by operating activities 
for the first six months of fiscal 1997 reflect a reduction in 
accounts receivable and inventories and an increase in accounts 
payable.
 
		The cash flows used by investing activities were $1.5 
million for the first six months of fiscal 1998 as compared to 
$3.2 million for the first six months of fiscal 1997.  The cash 
flows used by investing activities for the first six months of 
fiscal 1998  consist of $1.9  million in capital expenditures 
offset somewhat by an increase in capital expenditures payable 
of $.4 million.  The cash flows used by investing activities 
for the first six months of fiscal 1997 consist of capital 
expenditures of $1.7 million and a reduction in capital 
expenditures payable of $1.5 million.

The cash flows provided from financing activities were 
$4.8 million for the first six months of fiscal 1998 as 
compared to $ 2.1 million for the first six months of fiscal 
1997. The cash flows provided from financing activities for the 
first six months of fiscal 1998 reflect net advances of $4.8 
million on the Company's line of credit which were used 
primarily for the working capital needs discussed above.  The 
cash flows provided from financing activities for the first six 
months of fiscal 1997 reflect net advances of $ 2.6 million on 
the Company's line of credit and $.5 million used for the 
purchase of treasury stock.


Working capital at March 28, 1998 was $ 12.5 million as 
compared to $ 11.3 million at September 27, 1997, and the 
current ratio was 1.4 to 1.0 as compared to 1.5 to 1.0. 

The Company's primary ongoing cash requirements are for 
working capital needs.  The two sources for the Company's 
liquidity are internally generated funds and its bank credit 
facility.  The Company has $15.4 million in borrowings 
outstanding on its line of credit as of March 28, 1998.  The 
Company believes that the unused portion of its $24.5 million 
bank credit facility and internally generated funds will be 
sufficient to fund its ongoing cash needs.


Year 2000 Compliance
	
		The Company is in the process of modifying or replacing 
its computer software and systems in order to resolve the Year 
2000 problem. The Year 2000 problem is the result of programs 
being designed to use two digits instead of four to define the 
applicable year, therefore, it would recognize "00" as the year 
1900 rather than the year 2000. The Company does not expect 
that the cost of this process will be material to its financial 
statements or results of its operations.


Outlook

		Management continues to see strength in both demand and 
pricing for the Company's products as exhibited by current 
bookings. Further improvements in productivity combined with 
strong demand and pricing in the Company's major markets should 
continue to strengthen operating results.


Forward-Looking Statements

The matters discussed or incorporated by reference in this 
Report on Form 10-Q that are forward-looking statements (as 
defined in the Private Securities Litigation Reform Act of 
1995) involve risks and uncertainities.  These risks and 
uncertainities include, but are not limited to, reliance on the 
truck and utility vehicle industry; excess industry capacity; 
product demand and industry pricing; volatility of raw material 
costs, especially steel scrap; intense foreign and domestic 
competition; management's estimate of niche market data; the 
cyclical and capital intensive nature of the industry; and cost 
of compliance with environmental regulations.  These risks and 
uncertainities could cause actual results of the Company to 
differ materially from those projected or implied by such 
forward-looking statements.


<PAGE>
	PART II. - OTHER INFORMATION

   

ITEM 4.     Submission of Matters to a Vote of Security-Holders
		
The annual meeting of shareholders was held on 
February 4, 1998.  In connection with the meeting, 
proxies were solicited pursuant to the Securities 
Exchange Act.  The following are the voting results 
on proposals considered and voted upon at the 
meeting, all of which were described in the proxy 
statement.

1. The nominees  for director were elected.  The  
   vote was as follows:
                                                       Term
	                                    For    Withheld Expires

              Carl E. Edwards, Jr. 4,387,841  20,700   2001
              J. Marvin Quin, II   4,388,641  19,900   2001
	
              2. The proposal to ratify the Board of Directors' 
                 appointment of Arthur Andersen LLP as the     
                 Company's independent public accountants for  
                 the fiscal year ending September 26, 1998.
                 (For 4,401,041; Against 4,600; Abstain 2,900)

ITEM 6.     Exhibits and Reports on Form 8-K                 
   

A)  Exhibits  

               3.1   -  Certificate of Incorporation of      
                        Kentucky Electric Steel, Inc., filed 
                        as Exhibit 3.1 to Registrant's       
                        Registration Statement on Form S-1
                           (No. 33-67140), and incorporated by 
                           reference herein.






                  3.2   -  By-Laws of Kentucky Electric Steel, 
                           Inc., filed as Exhibit 3.2 to       
                           Registrant's Registration Statement 
                           on Form S-1 (No. 33-67140), and     
                           incorporated by reference herein.
    
              27     -  Financial Data Schedule

             B)  Reports on Form 8-K - None.




<PAGE



SIGNATURES

                                      
     Pursuant to the requirements of the Securities Exchange 
Act of 1934, the Registrant has duly caused this report to be 
signed on its behalf by the undersigned thereunto duly 
authorized.




DATED:  May 11, 1998         KENTUCKY ELECTRIC STEEL, INC. 
                                      (Registrant) 

                                 William J. Jessie          
                           William J. Jessie, Vice President,
                             Secretary, Treasurer, and
                             Principal Financial Officer
</DOCUMENT