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 29, 1997            


                                    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 12, 1997, is as follows:

       4,623,123 shares of voting common stock, par value $.01
per share.

<PAGE>


               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 Statement of Cash Flows      5
          
            Notes to Consolidated Condensed Financial Statements  
                                                              6-7 
      
   Item 2 - Management's Discussion and Analysis of Financial
              Condition and Results of Operations .....      8-11


PART II.    OTHER INFORMATION 

   Item 4 - Submission of Matters to a Vote of Security Holders   
                                                               12

   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)
   <CAPTION>   
                                                      March 29,    Sept. 28, 
                                                        1997         1997   

   <S>                                                <C>           <C> 
                       ASSETS
   CURRENT ASSETS
     Cash and cash equivalents                      $    124       $    124
     Accounts receivable, less allowance for doubtful
       accounts and claims of $530 at March 29, 1997  
       and $390 at September 28, 1996                 11,186         12,113
     Inventories                                      15,157         17,367
     Operating supplies and other current assets       6,044          5,067
     Refundable income taxes                             951            540 
     Deferred tax assets                                 309            680 
                                                     -------        ------- 
       Total current assets                           33,771         35,891
                                                     -------        -------
   PROPERTY, PLANT AND EQUIPMENT
     Land and buildings                                4,448          4,353
     Machinery and equipment                          38,861         37,774
     Construction in progress                          1,958          1,412
     Less - accumulated depreciation                  (9,500)        (7,852)
                                                     -------        -------
          Net property, plant and equipment           35,767         35,687
                                                     -------        -------
   DEFERRED TAX ASSETS                                 7,680          6,263
                                                     -------        -------
   OTHER ASSETS                                          747            592
                                                     -------        -------
          Total assets                              $ 77,965       $ 78,433

        LIABILITIES AND SHAREHOLDERS' EQUITY
   CURRENT LIABILITIES
     Advances on line of credit                     $ 10,120       $  7,546
     Accounts payable                                  9,283          7,214
     Capital expenditures payable                        906          2,404
     Accrued liabilities                               3,292          3,639
     Current portion of long-term debt                   125            125
                                                     -------        -------
          Total current liabilities                   23,726         20,928 
                                                     -------        -------
   LONG-TERM DEBT                                     20,000         20,000
                                                     -------        -------
   OTHER LIABILITIES                                     494            395
                                                     -------        -------
          Total liabilities                           44,220         41,323
                                                     -------        -------
   SHAREHOLDERS' EQUITY
     Preferred stock, $.01 par value, 1,000,000
       shares authorized, no shares issued              -              -
     Common stock, $.01 par value, 15,000,000       
       shares authorized, 4,974,099 shares                                 
       issued, respectively                               50             50
     Additional paid-in capital                       15,710         15,710
     Less treasury stock - 349,176 and 273,000  
       shares at cost, respectively                   (2,628)        (2,165)
     Deferred compensation                              (280)          (421)
     Retained earnings                                20,893         23,936
                                                     -------        -------
          Total shareholders' equity                  33,745         37,110
                                                     -------        -------
          Total liabilities and shareholders' equity$ 77,965       $ 78,433
<FN>
            See notes to condensed consolidated financial statements
</TABLE>
<TABLE>
                  KENTUCKY ELECTRIC STEEL, INC. AND SUBSIDIARY
                 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
                  (Dollars in Thousands, Except Per Share Data)
                                   (Unaudited)
<CAPTION>

                                Three Months Ended       Six Months Ended  
                               March 29,   March 30,   March 29,   March 30,
                                 1997        1996        1997        1996  
 
<S>                            <C>         <C>         <C>         <C> 
NET SALES                      $ 23,159    $ 24,625    $ 46,541    $ 48,313
COST OF GOODS SOLD               23,615      22,178      47,011      43,290
                                 ------     -------     -------     -------
       Gross Profit (Loss)         (456)      2,447        (470)      5,023
SELLING AND ADMINISTRATIVE EXPENSES 1,658       2,024        3,383      
3,987
                                -------     -------      -------     -------
       Operating income (loss)   (2,114)       423       (3,853)      1,036

INTEREST INCOME AND OTHER             6          14           11          19
INTEREST EXPENSE                   (554)       (415)      (1,048)      
(773)
GAIN ON INVOLUNTARY CONVERSION 
  OF EQUIPMENT                      -           369         -            369
                                -------     -------      -------     -------
       Income (loss) before income taxes    (2,662)        391        
(4,890)        651
     
PROVISION (CREDIT) FOR INCOME TAXES (1,003)        148         (1,847)       
246
                                -------     -------      -------     -------

       Net income (loss)       $ (1,659)   $    243     $ (3,043)   $    405

NET INCOME (LOSS) PER COMMON SHARE        $   (.36)   $    .05       $  
(.66)   $    .08

WEIGHTED AVERAGE SHARES OUTSTANDING      4,626,639   4,828,055     
4,643,258   4,850,395

<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               
                                         March 29,         March 30,
                                            1997             1996  
<S>                                      <C>               <C>
Cash Flows From Operating Activities:
  Net income (loss)                     $ (3,043)          $    405
  Adjustments to reconcile net income (loss) to
    net cash flows from operating activities:
      Depreciation and amortization        1,821              1,291
      Gain on involuntary conversion of equipment             -              
   (369)
      Change in deferred taxes            (1,417)               746
      Change in other                        (88)              (218)
      Change in current assets and current
        liabilities:
          Accounts receivable                927               (517)
          Insurance claim receivable        -                (2,600)
          Inventories                      2,210              4,366 
          Operating supplies and other                             
            current assets                  (977)              (546)
          Deferred tax assets                371                (72)
          Accounts payable                 2,069              1,977
          Accrued liabilities               (347)              (508)
          Accrued income taxes refundable/payable             (411)          
   (441)
                                         -------            -------
          Net cash flows from operating activities           1,115           
  3,514
                                         -------            -------
Cash Flows From Investing Activities:
  Proceeds from involuntary conversion of equipment           -              
    912
  Capital expenditures                    (1,728)            (5,634)
  Change in capital expenditures payable  (1,498)               549
                                         -------            -------
          Net cash flows from investing activities          (3,226)          
 (4,173)
                                         -------            -------
Cash Flows From Financing Activities:
  Net advances (repayments) on line of credit                 2,574          
  (9,944)
  Repayments on long-term debt              -                (9,001)
  Proceeds from long-term debt borrowing    -                20,000 
  Purchases of treasury stock               (463)              (539)
                                         -------            -------
          Net cash flows from financing activities           2,111           
    516
                                         -------            -------
          Net decrease in cash and cash equivalents           -              
   (143)

Cash and Cash Equivalents at Beginning of Period               124           
    327
                                         -------            -------
Cash and Cash Equivalents at End of Period                $    124          
$    184

Interest Paid, net of amount capitalized$  1,050           $    306

Income Taxes Paid                       $   -              $     14

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


              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 29,
1997, are not necessarily indicative of the results that may be
expected for the year ended September 27, 1997.  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 28, 1996.

  Net income per common share is calculated based on 4,626,639 and
4,828,055 weighted average number of common shares outstanding during
the quarters ended March 29, 1997, and March 30, 1996, respectively. 
Net income per common share is calculated based on 4,643,258 and
4,850,395 weighted average number of shares outstanding for the six
months ended March 29, 1997 and March 30, 1996, respectively.


(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 costs of $3,000
and $32,000 were capitalized for the quarters ended March 29, 1997 and
March 30, 1996, respectively.  Interest costs of $11,000 and $84,000
were capitalized for the six months ended March 29, 1997 and March 30,
1996, respectively. 

(3)  Inventories

  Inventories at March 29, 1997 and September 28, 1996 consist of the
following ($000's):
                                            March 29,     September 28,
                                            1997            1996     
           Raw materials                   $  3,067        $  4,069 
           Semi-finished and finished goods  12,090          13,298
             Total inventories             $ 15,157        $ 17,367 


(4)  Long-Term Debt

  The Company's unsecured senior notes and bank credit facility
agreements were amended, effective December 28, 1996, to reduce the
required fixed charge coverage ratio, increase the minimum net worth
requirement and revise other miscellaneous provisions of the
agreements.  In connection with the amendment, the amount of the
Company's unsecured bank credit facility has been reduced from $24.5
million to $17.5 million.  With this amendment, the Company continues
to be in compliance with the financial covenants and management
believes it is probable that the Company will continue to be in
compliance with the amended covenants.


(5)  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.  However, discovery of unknown conditions
could result in the recording of accruals in the periods in which they
become known.


(6)  Subsequent Event

  Subsequent to the end of the fiscal quarter, the Company reported
the detection of a radioactive substance in baghouse dust, a by-product
of the melting process.  As a result, the Company's melt shop
operations were shut down for twelve days in order to decontaminate its
baghouse facility.  The contaminated dust was handled in such a manner
that it posed no safety or health threat and the clean-up and disposal
is being performed under the direction and oversight of appropriate
governmental agencies and with the help of outside consultants.  The
Company maintains both radiation contamination and business
interruption insurance and therefore believes that the contamination
will not have a material effect on the Company's financial position or
results of operations.  Management is in the process of assessing the
full impact of the event. 
<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, cold drawn bar converters, flat bed truck
trailers, and steel service centers.

  Net Sales.  Net sales decreased $1.5 million (6.0%) in the second
quarter of fiscal 1997 to $23.1 million, as compared to $24.6 million
for the second quarter of fiscal 1996.  The decrease in net sales is
attributed to a decrease in average net selling price and a 3.0%
decrease in shipments.  Net sales for the six months ended March 29,
1997 decreased $1.8 million (3.7%) to $46.5 million, as compared to
$48.3 million for the six months ended March 30, 1996.  The decrease in
net sales is attributed to a decrease in average net selling price with
shipments remaining constant for the six months ended March 29, 1997 as
compared to the six months ended March 30, 1996.  The decrease in
average selling price is attributed to a change in product mix and
downward pricing pressures.  The change in product mix reflects an
increase in shipments to the cold drawn bar converter market in the
highly competitive, lower priced, smaller size ranges, which has been
partially offset by an increase of shipments of higher priced thicker,
wider bar flats. 

  Cost of Goods Sold.  Cost of goods sold increased $1.4 million
(6.5%) in the second quarter of fiscal 1997 to $23.6 million, as
compared to $22.2 million for the second quarter of fiscal 1996.  As a
percentage of net sales, cost of goods sold increased from  90.1% for
the three months ended March 30, 1996 to 102.0% for the three months
ended March 29, 1997.  Cost of goods sold for the six months ended
March 29, 1997 increased $3.7 million (8.6%) to $47.0 million as
compared to $43.3 million for the six months ended March 30, 1996.  As
a percentage of net sales, cost of goods sold increased from 89.6% for
the six months ended March 30, 1996 to 101.0% for the six months ended
March 29, 1997.  The increase in cost of goods sold is due to higher
conversion costs and additional depreciation related to the start-up of
the ladle metallurgy and casting facilities, which has been partially
offset by a decrease in material costs.  Conversion costs for the three
and six months ended March 29, 1997 were adversely impacted by repair
and maintenance cost and supply cost related to a major repair of the
caster superstructure, as well as by significant production
inefficiencies related to the shut-down and restart of the caster.  The
caster was shut-down for 10 days in late December and early January to
allow for the repairs to be made.  At the same time, the Company
converted an additional caster strand to allow for increased production
of thicker, wider products.  The production inefficiencies caused by
the shut-down were largely overcome by late in the second quarter. 
Also adversely impacting conversion costs, although to a lesser degree,
was the continued start-up phase of the new ladle metallurgy facility,
which came on-line in the fourth quarter of fiscal 1996.   The quarter
and six months ended March 30, 1996 includes a $1.7 million
reimbursement from business interruption insurance, related to the
caster fire, in the calculation of cost of goods sold.

  Gross Profit (Loss).  As a result of the above, the second quarter
of fiscal 1997 reflected a gross loss of $.5 million as compared to
gross profit of $2.4 million for the second fiscal quarter of 1996.  As
a percentage of net sales, gross profit decreased from  9.9% for the
three months ended March 30, 1996 to (2.0%)  for the three months ended
March 29, 1997.    

  Similarly, the six months ended March 29, 1997 reflected a gross
loss of $.5 million as compared to gross profit of $5.0 million for the
six months ended March 30, 1996.  As a percentage of net sales, gross
profit decreased from 10.4% for the six months ended March 30, 1996 to
(1.0%) for the six months ended March 29, 1997.

  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 decreased by
approximately $366,000 and $604,000 for the three months and six months
ended March 29, 1997, respectively, as compared to the same periods in
fiscal 1996.  These decreases in selling and administrative expenses
were primarily the result of a reduction in the provision for
uncollectible accounts (which was higher in the prior periods due to
problems with certain specific accounts), a decrease in health benefit
costs, and a decrease in legal and professional fees.  The decreases
for the second quarter of 1997 have been slightly offset by an increase
in workers compensation expense.  As a percentage of net sales, such
expenses decreased from 8.2% for the three months ended March 30, 1996
to  7.2% for the three months ended March 29, 1997.  As a percentage of
net sales, such expenses decreased from 8.3% for the six months ended
March 30, 1996 to 7.3% for the six months ended March 29, 1997.  

     Operating Income (Loss). For the reasons described above, the
second quarter of fiscal 1997 reflected an operating loss of $2.1
million as compared to operating income of $.4 million for the second
fiscal quarter of 1996.  As a percentage of net sales, operating income
decreased from 1.7% in the second quarter of 1996 to (9.1%) in the
second quarter of 1997.

  Similarly, the six months ended March 29, 1997 reflected an
operating loss of $3.9 million as compared to operating income of $1.0
million for the six months ended March 30, 1996.  As a percentage of
net sales, operating income decreased from 2.1% for the six months
ended March 30, 1996 to (8.3%) for the six months ended March 29, 1997.

  Interest Expense.  Interest expense increased by $139,000 for the
three months ended March 29, 1997 from $415,000 for the second quarter
of fiscal 1996 to $554,000 for the second quarter of fiscal 1997, net
of interest capitalized of $32,000 and $3,000, respectively.  Interest
expense for the six months ended March 29, 1997 increased $275,000 from
$773,000 for the six months ended March 30, 1996 to $1,048,000 for the
six months ended March 29, 1997, net of interest capitalized of $84,000
and $11,000, respectively.  The increase in interest expense was
attributed to the additional debt incurred in financing the capital
expansion projects and the reduction of capitalized interest due to the
completion and start-up of the ladle metallurgy facility.
 
  Gain on Involuntary Conversion of Equipment.  As a result of the
caster fire, during the second quarter of fiscal 1996, the Company
received insurance proceeds of $912,000 for the replacement cost of the
equipment destroyed which had a net book value of $543,000.  The excess
of the replacement cost over the net book value of the equipment
destroyed resulted in a gain of approximately $369,000.

  Net Income (Loss).  As a result of the above, the second quarter of
fiscal 1997 reflected a net loss of $1.7 million as compared to net
income of $.2 million for the second quarter of fiscal 1996. 

   Similarly, the six months ended March 29, 1997 reflected a net
loss of $3.0 million as compared to net income of $.4 million for the
six months ended March 30, 1996.

Liquidity and Capital Resources.  

     The cash flows provided from operating activities were $1.1
million for the first six months of fiscal 1997 as compared to $3.5
million for the first six months of fiscal 1996.  The first six months
of fiscal 1997 operating cash flows reflect a reduction in accounts
receivable and inventories and an increase in accounts payable.  The
first six months of fiscal 1996 operating cash flows reflect the
reduction in raw material and work in process inventories and an
increase in accounts payable.   

  The cash flows used by investing activities were $3.2 million for
the first six months of fiscal 1997 as compared to $4.2 million for the
first six months of fiscal 1996.  The first six months of fiscal 1997
investing cash flows reflect capital expenditures of $1.7 million and
payments on capital expenditures payable of $1.5 million.  The first
six months of fiscal 1996 investing cash flows reflect capital
expenditures of $5.6 million which has been offset by an increase in
capital expenditures payable of $.5 million and the proceeds from the
involuntary conversion of equipment of $.9 million.

  The cash flows from financing activities were $2.1 million for the
first six months of fiscal 1997 as compared to $.5 million for the
first six months of fiscal 1996.  The cash flows from financing
activities for fiscal 1997 reflect net advances of $2.6 million on the
Company's line of credit  and $.5 million for purchase of treasury
stock.  The cash flows from financing activities for fiscal 1996
reflect net repayments of $10.0 million on the Company's line of
credit, $9.0 million repayment on long-term debt, and $.5 million for
purchase of treasury stock; however, these amounts were offset with the
proceeds of $20.0 million of new long-term debt.

  Working capital at March 29, 1997 was $10.0 million as compared to
$15.0 million at September 28, 1996, and the current ratio was 1.4 to
1.0 as compared to 1.7 to 1.0.  The decrease in working capital and
current ratio is primarily attributed to a decrease in accounts
receivable and inventories and an increase in accounts payable and
advances on the line of credit.

  The Company's primary ongoing cash requirements are for the payment
of retainage on the capital expansion projects and current capital
expenditures.  The two sources for the Company's liquidity are
internally generated funds and its bank credit facility.  The Company
had $10.1 million in borrowings outstanding on its line of credit as of
March 29, 1997.  The Company believes that the bank credit facility and
internally generated funds will be sufficient to fund its ongoing cash
needs through the next twelve-month period.

Recent Accounting Pronouncements

  In February 1997, the Financial Accounting Standards Board issued
Statement No. 128 (SFAS No. 128) related to the computation and
presentation of earnings per share data.  Under SFAS No. 128, basic and
diluted earnings per share for the three months and six months ended
March 29, 1997 would have been the same as reported.

Outlook

  Management believes that the major modifications to the new
equipment are complete as indicated by the productivity gains realized
during the second quarter.  Also, although spring pricing remains soft,
demand is strong in the other markets the Company serves and price
increases have been implemented on many products effective in March and
April.  Continued strength in certain markets and productivity
improvements should improve third and fourth quarter operating results.

  Subsequent to the end of the fiscal quarter, the Company reported
the detection of a radioactive substance in baghouse dust, a by-product
of the melting process.  The company's melt shop operations were shut
down for twelve days in order to decontaminate its baghouse facility. 
The Company maintains both radiation contamination and business
interruption insurance and therefore believes that the contamination
will not have a material effect on the Company's financial position or
result of operations.  Management is in the process of assessing the
full impact of the event.

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) including those
statements in "Outlook" above, involve risks and uncertainties.  These
risks and uncertainties include, but are not limited to, the reliance
on 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
uncertainties 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 6,
          1997.  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 nominee for director was elected.  The vote was as
              follows:

                                      For      Withheld    Term Expires
              Charles C. Hanebuth  3,885,412    285,726       2000  

          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 27, 1997.  (For 4,162,263; Against 5,741;
              Abstain 3,134)
   

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 12, 1997                KENTUCKY ELECTRIC STEEL, INC.  
                                             (Registrant) 

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