SECURITIES AND EXCHANGE COMMISSION
                    Washington, D. C.  20549
  
  
  [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE        
SECURITIES EXCHANGE ACT OF 1934
  
          For the quarterly period ended June 30, 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 Number 0-3855
  
  
                      LACLEDE STEEL COMPANY             
     (Exact name of Registrant as specified in its charter)
  
            Delaware                        43-0368310    
  (State or other jurisdiction of       I.R.S. Employer
  incorporation or organization)        Identification No.
  
  
      One Metropolitan Square, St. Louis, Missouri  63102
            (Address of principal executive offices)
                           (Zip code)
  
  
                          314-425-1400                         
      (Registrant's telephone number, including area code)
  
                                                                 
    (Former name, former address and former fiscal year, if
  changed since last report)
   
     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      
  
     As of July 31, 1998 there were 4,056,140 shares of $.01
    par value common stock outstanding.<PAGE>


          LACLEDE STEEL COMPANY
             AND SUBSIDIARIES
  CONSOLIDATED STATEMENTS OF OPERATIONS
   (In Thousands Except Per Share Data)


                                          Second Quarter EndeYear to Date
                                          June 30,           June 30,
                                          1998     1997      1998     1997

Net sales                                 $ 76,840 $ 78,722  $161,395 $159,568

Costs and expenses:
     Cost of products sold                  76,718   71,180   154,356  145,050
     Selling, general and adm. exp.          3,312    3,251     6,755    6,610
     Depreciation                            1,712    1,918     3,423    3,860
     Interest expense, net                   2,714    2,345     5,392    4,772
     Unusual charges (credits)              25,434       --    27,902     (987)
          Total costs and expenses         109,890   78,694   197,828  159,305

Earnings (loss) before income taxes        (33,050)      28   (36,433)     263

Provision for income taxes                  32,418       19    31,073      119

Net earnings (loss)                        (65,468)       9   (67,506)     144

Preferred stock dividend requirement           (93)     (94)     (187)    (188)

Net loss - common shareholders            $(65,561) $   (85) $(67,693) $   (44)

Basic and diluted
  net loss per share                      $ (16.16) $ (0.02) $ (16.69) $ (0.01)


















                  - 1 -
<PAGE>


           LACLEDE STEEL COMPANY
              AND SUBSIDIARIES
        CONSOLIDATED BALANCE SHEETS
                   ASSETS
               (In Thousands)


                                                       Jun. 30,       Dec. 31,
                                                         1998           1997

Current Assets:
    Cash and cash equivalents                         $     195      $     186
    Accounts receivable, less allowances                 38,024         40,282
    Prepaid expenses                                      1,606          1,238
    Inventories:
        Finished                                         43,057         45,823
        Semi-finished                                    16,833         18,166
        Raw materials                                     6,047          4,681
        Supplies                                         12,885         14,136
        Total inventories                                78,822         82,806

            Total Current Assets                        118,647        124,512



Non-Current Assets:
    Intangible pension asset                             13,167         14,652
    Other intangible assets                               2,047          2,119
    Bond funds in trust                                   2,385          2,385
    Prepaid pension contributions                         1,895          5,441
    Deferred income taxes                                    --         45,400
    Notes receivable                                         --          3,396
    Other                                                 4,489          4,897
            Total Non-Current Assets                     23,983         78,290




Plant and Equipment, at cost                            219,293        239,670
    Less - accumulated depreciation                     130,089        128,652
            Net Plant and Equipment                      89,204        111,018




Total Assets                                          $ 231,834      $ 313,820




- 2 -
<PAGE>





LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)



                                                      Jun. 30,       Dec. 31,
                                                        1998           1997

Current Liabilities:
    Accounts payable                                  $  47,309      $  42,682
    Accrued compensation                                  6,272          6,269
    Current portion of long-term debt                     1,085          1,085
    Bank credit facility                                 83,966          1,271
    Accrued costs of pension plans                       13,577         13,577
    Other                                                 3,487          3,729
            Total Current Liabilities                   155,696         68,613


Non-Current Liabilities:
    Accrued costs of pension plans                       34,831         36,864
    Accrued postretirement medical benefits              74,268         75,864
    Other                                                 2,691          2,221
            Total Non-Current Liabilities               111,790        114,949


Long-Term Debt:
    Bank credit facility                                     --         83,827
    Revenue bonds                                        23,330         23,330
    Other                                                 2,000          2,000
            Total Long-Term Debt                         25,330        109,157



Stockholders' Equity (Deficit):
    Preferred stock, no par value, authorized 2,000,000
      shares; issued and outstanding 416,667 shares          83             83
    Common stock, $0.01 par value, authorized 25,000,000
      shares; issued and outstanding 4,056,140 shares        41             41
    Capital in excess of par value                       59,576         59,763
    Accumulated deficit                                 (82,813)       (15,307)
    Minimum pension liability adjustment                (37,869)       (23,479)
            Total Stockholders' Equity (Deficit)        (60,982)        21,101



Total Liabilities and Stockholders' Equity (Deficit)  $ 231,834      $ 313,820


                   - 3 -
<PAGE>


LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

                                                       Six Months Ended
                                                       June 30,
                                                       1998      1997

Cash flows from operating activities:
 Net earnings (loss)                                  $(67,506) $    144
 Adjustments to reconcile net earnings (loss) to
    net cash provided by operating activities:
      Depreciation                                       3,423     3,860
      Other charges                                      4,889        --
      Impairment loss - plant & equipment               21,362        --
      Gain on sale of facility                              --      (987)
      Change in deferred income taxes                   31,010        60
 Changes in assets and liabilities that
    provided (used) cash, net of effects from sale of facility:
       Accounts receivable                               2,258     2,085
       Inventories                                       3,984     1,726
       Accounts payable and accrued expenses             4,270    (2,621)
       Accrued pension cost                              3,923     4,440
       Pension cash funding                             (5,814)   (5,957)
       Accrued postretirement medical benefits          (1,596)   (1,100)
       Other assets and liabilities                        281       604
  Net cash provided by operating activities                484     2,254


Cash flows from investing activities:
  Capital expenditures                                  (2,958)     (771)
  Proceeds from sale of equipment                        3,625        --
  Proceeds from sale of facility                            --     9,319
  Payment received on note from sale of facility            --       200
  Net cash provided by investing activities                667     8,748

Cash flows from financing activities:
  Net repayments under revolving credit                   (496)   (9,285)
  Payments on long-term debt                              (636)   (1,717)
  Payment of financing costs                               (10)       (7)
  Net cash used in financing activities                 (1,142)  (11,009)

Cash and cash equivalents:
  Net increase (decrease) during the period                  9        (7)
  At beginning of year                                     186       143
  At end of period                                    $    195  $    136


- 4 -
<PAGE>


LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY (DEFICIT)
(In Thousands Except Per Share Data)

                                            6 Months          Year
                                            Ended             Ended
                                            Jun. 30,          Dec. 31,
                                            1998              1997

Preferred stock
  (416,667 shares issued)
  Beginning balance                         $     83          $     83
  Sale of convertible preferred stock             --                --
  Ending balance                                  83                83

Common stock - $0.01 par value
  (4,056,140 shares issued)
  Beginning balance                               41                41
  Change in period                                --                --
  Ending balance                                  41                41

Capital in excess of par value
  Beginning balance                           59,763            60,138
  Dividend on convertible preferred stock       (187)             (375)
  Ending balance                              59,576            59,763

Accumulated deficit
  Beginning balance                          (15,307)          (12,300)
  Net loss                                   (67,506)           (3,007)
  Ending balance                             (82,813)          (15,307)

Minimum pension liability
  Beginning balance                          (23,479)          (30,717)
  Change in period                           (14,390)            7,238
  Ending balance                             (37,869)          (23,479)



Total Stockholders' Equity (Deficit) at End 
  Of Period                                 $(60,982)         $ 21,101











- 5 -
<PAGE>
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - GENERAL

  The accompanying unaudited consolidated financial statements
  include the accounts of Laclede Steel Company and its wholly-owned
subsidiaries.  All intercompany accounts and transactions
  have been eliminated.  The consolidated financial statements
  reflect all adjustments (such adjustments are of a normal
  recurring nature unless otherwise disclosed in these interim
  financial statements) which are in the opinion of Management
  necessary for a fair statement of the results for the interim
  periods.

  The financial statements have been prepared on a going concern
  basis, which contemplates the realization of assets and the
  satisfaction of liabilities in the normal course of business. 
  The Company's continuation as a going concern is dependent upon
  its ability to generate sufficient cash flow to meet its
  obligations on a timely basis.  The Company's ability to
  generate such cash flow requires it to (a) maintain and comply
  with the terms of its Loan and Security Agreement; (b) maintain
  sales levels; (c) avoid significant sales price decreases; (d)
  reduce costs and improve operating performance; and (e)
  successfully implement significant portions of its
  restructuring plan.  Refer to Item 2 - Management's Discussion
  and Analysis for discussion of the Company's restructuring
  plan.

NOTE 2 - UNUSUAL CHARGES (CREDITS)

  Unusual charges in the second quarter and first half of 1998
  include the following (millions of dollars):

                                   Second    First Six
                                   Quarter    Months  
  Impairment Loss - HTMR Facility   $15.4      $15.4
  Impairment Loss - Memphis Plant     6.0        6.0
  Retirement of Executive Officers
    and Severance Pay                 2.7        4.9
  Restructuring Expenses              1.3        1.6
                                    $25.4      $27.9

  In December 1997, the Company idled its High Temperature Metal
  Recovery facility ("HTMR") after the facility became inoperable
  due to an accident.  This facility was used to dispose of the
  EAF dust generated in the Melt Shop at the Alton Plant.  During
  1998, the Company has disposed of the EAF dust through
  alternative methods.  Management has completed an evaluation of
  the HTMR facility to determine the economic feasibility of
  repairing and operating the unit, and determined that the HTMR
  unit currently cannot function on an economically feasible
  basis.  Therefore an impairment loss of $15.4 million has been
  recorded in the second quarter of 1998.  The impairment loss
  for the Memphis Plant is related to the decision to consolidate 
                              - 6 -<PAGE>
  
  Wire Operations at the Fremont Plant and shut down the Memphis
  Plant.  The assets of the Memphis Plant have been made
  available for sale; operations will be discontinued by the end
  of the third quarter.

  Charges for retirements and severance pay include approximately
  $2.6 million and $4.7 million respectively, in the second
  quarter and first six months of 1998 related to former officers
  of the Company.  The majority of these charges are non-cash in 
  nature and are related to the accounting requirements for the
  Key Employee Retirement Plan.  Restructuring expenses include
  consulting fees incurred in connection with the Company's
  restructuring plan, and non-cash accounting accruals related to
  the Company's sub-lease of a portion of its Corporate office
  space.

  In February 1997, the Company sold the assets of its electric
  weld structural and mechanical tubing operation, located in
  Benwood, West Virginia.  Cash proceeds from the sale of these
  assets, which consist primarily of equipment and inventory,
  totaled approximately $11.0 million.  This transaction resulted
  in a gain on sale of equipment of $987 thousand recorded in
  February 1997.

NOTE 3 - INCOME TAXES

  At March 31, 1998 the Company had net deferred tax assets of
  $46.7 million.  Statement of Financial Accounting Standards No.
  109 "Accounting for Income Taxes" requires that deferred tax
  assets be reduced by a valuation allowance if it is more likely
  than not that some portion or all of the deferred tax assets
  will not be realized.  In evaluating the deferred tax asset at
  December 31, 1997 and March 31, 1998, Management believed that
  Company-wide cost reductions and productivity improvements
  previously implemented would return the Company to
  profitability in 1998.  However, in view of the operating
  losses reported for the second quarter of 1998, Management no
  longer anticipates profitable operations for the year 1998. 
  Furthermore 1998 will be the Company's fourth successive loss
  year.  Therefore a valuation allowance of $46.7 million has
  been recorded in the second quarter of 1998, of which $32.4
  million is reported as a provision for income taxes.  The
  remaining portion, which relates to the minimum pension
  liability adjustment, has been reported as an adjustment to
  stockholders' equity.

NOTE 4 - PER SHARE DATA

  Per share amounts have been calculated based on weighted
  average shares outstanding of 4,056,140.  Net loss per share
  for 1998 and 1997 were computed by dividing the net earnings
  after deducting preferred dividend requirements by the weighted
  average shares outstanding.

 The financial results for 1998 are subject to annual audit.

                              - 7 -<PAGE>
ITEM 2.   MANAGEMENT'S DISCUSSION & ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS


                 Liquidity and Capital Resources

  In the first half of 1998 operating activities provided $0.5
million in cash.  Net losses, after adjustment for depreciation,
unusual charges and the valuation allowance for deferred income
taxes, used $6.8 million in cash.  This was offset by accounts
receivable and inventory decreases totaling $6.2 million, and
increases in accounts payable and accrued expenses of $4.3
million.

  In January 1998 the Company completed the sale and leaseback
transaction for the Ladle Metallurgy Facility at the Alton Plant. 
This final step of the sale and leaseback transaction provided
the Company with $3.6 million in cash.

  At June 30, 1998, $76.0 million in borrowings were
outstanding under the Company's revolving credit portion of its
bank credit facility, with unused availability of $1.5 million. 
Amounts available under this facility were utilized early in the
third quarter of 1998 to cover outstanding short-term
commitments, primarily trade accounts payable.

  As a result of the losses reported in the second quarter, it
was necessary for the Company to amend its Loan and Security
Agreement ("Loan Agreement") with its Banks to obtain a waiver of
financial covenant violations relating to operating results and
net worth.  The Company was able to obtain the waiver, and has
reached agreement with its Banks on a revised total credit
facility of $85.0 million, including new financial covenants for
the second half of 1998.  The amendment to the Loan Agreement
provides that financial covenants for periods after December 31,
1998 are to be reset based on financial information available
later in the year.  Because the financial covenants have not as
yet been determined for periods after December 31, 1998 the
Company is unable to demonstrate that it expects to be in
compliance with the Loan Agreement for periods after December 31,
1998.  Therefore in accordance with SEC and accounting
regulations the Company has classified amounts due under the Loan
Agreement as a current liability.

  Management now believes that the Company will not have
operating profits for 1998.  As a result, the Company has
developed a restructuring plan to improve operating results and
enhance financial flexibility.  The plan includes actions to
increase short-term cash flow as well as a program to reorganize
operations and improve operating efficiency for the long-term.




                              - 8 -<PAGE>
  The Company has held discussions with certain trade
creditors with regard to outstanding accounts payable balances. 
The terms of repayment have not yet been finalized, but the
Company anticipates that amortization will not begin until the
second quarter of 1999.  These creditors are continuing to supply
materials to the Company.

  The plan to reorganize operations and improve operating
efficiencies includes the consolidation of Wire and Tubular
Operations, improvement in operations in the Melt Shop and Bar
Mill at the Alton Plant, and consolidation of certain
administrative functions.  As a first step, in May 1998 the Board
of Directors approved the program to consolidate Wire Operations
by authorizing the shutdown of the Memphis Wire Plant and the
transfer of all oil tempered wire production to the Fremont
facility.  The Memphis Wire Plant has incurred significant losses
over the past several years.

  The Company's tubular products are currently produced at the
Alton and Fairless Plants, with finishing operations also
performed at the Vandalia Plant.  With current production and
shipping requirements, the Alton and Fairless Plants are each
operating at levels substantially below capacity.  Management is
studying a plan to consolidate pipe-making operations, at either
the Alton or Fairless Plants, in order to improve production
efficiencies and reduce the overall costs.  The Company has also
made changes in the senior management of the tubular products
group.

  The Company is also developing a program to improve the
operating efficiency of the Melt Shop and 14" Bar Mill at the
Alton Plant.  Realization of these improvements will require the
cooperation of the United Steelworkers' Union and the Company is
discussing the situation with the Union on an ongoing basis.

  The Company recently agreed to a sub-lease of approximately
one-half of its corporate office space.  As a result a number of
sales and administrative positions have been relocated to the
Alton Plant, improving efficiency and lowering corporate overhead
costs.

  The Company's continuation as a going concern is dependent
upon its ability to generate sufficient cash flow to meet its
obligations on a timely basis.  The Company's ability to generate
such cash flow requires it to (a) maintain and comply with the
terms of its Loan Agreement; (b) maintain sales levels; (c) avoid
significant sales price decreases; (d) reduce costs and improve
operating performance; and (e) successfully implement significant
portions of its restructuring plan.  While every effort is being
made to accomplish the above, there can be no assurance that it
will be successful.



                              - 9 -<PAGE>
  
By letter dated August 4, 1998, Nasdaq informed the Company
that its Common Stock would be removed from the Nasdaq National
Market System if the continued listing requirements are not met
by the Company or a plan for the Company's prompt compliance is
not submitted to Nasdaq on or before August 18, 1998.  Current
Nasdaq NMS continued listing requirements include the requirement
that an issuer maintain net tangible assets of at least $4.0
million.  Consequently the Company currently is out of compliance
with the listing requirements and the Company does not anticipate
that it will remain on the Nasdaq system.

  When the Company is removed from the Nasdaq system, trading
in the Common Stock will thereafter be conducted in the over-the-counter market
on an electronic bulletin board established for
securities that do not meet the Nasdaq inclusion requirements, or
alternatively in what are commonly referred to as the "pink
sheets".  As a result, an investor will find it more difficult to
dispose of, or to obtain accurate quotations as to the price of
the Company's securities.  Consequently, removal from the Nasdaq
system could affect the ability or willingness of broker-dealers
to sell the Company's securities and the ability of purchasers of
the Company's securities to sell their securities in the
secondary market.

                      Results of Operations

  Net sales increased by $1.8 million or 1.1% in the first
half of 1998 compared to the first half of 1997, primarily as a
result of a 3.0% increase in steel shipments.  The cost of
products sold increased by $9.3 million or 6.4% in the first half
of 1998 compared to the first half of 1997, reflecting higher
shipments and higher production costs discussed below.

  Net sales decreased by $1.9 million or 2.4% in the second
quarter of 1998 versus the 1997 second quarter, primarily as the
result of a weaker product mix.  The second quarter cost of
products sold increased by $5.5 million or 7.8%, reflecting the
higher production costs discussed below.

  A decline in contribution from the tubular product line was
the single most important factor in the operating losses reported
for the second quarter and first six months of 1998.  A decrease
in average selling prices, as well as production inefficiencies
partially related to an inventory reduction program, adversely
affected performance.

  In the second quarter of 1998 a decision was made to
increase maintenance expenditures above normal levels at the
Alton Plant in an effort to improve equipment reliability on an
ongoing basis.  These unbudgeted maintenance expenditures were 




                              - 10 -<PAGE>
charged to operating expenses in the second quarter.  The
contribution from Chain operations in the first half of 1998 was
significantly below 1997, reflecting lower sales of traction
chain products related to a poor winter season.  An increase in
average selling prices improved the contribution from SBQ Bars in
the first half of 1998.

  The unusual charges in the second quarter and first half of
1998, summarized in Note 2 to the Consolidated Financial
Statements, are partially related to the Company's overall plan
to improve cash flow, strengthen the balance sheet and enhance
financial flexibility discussed under Liquidity and Capital
Resources.

  The increase in interest expense in the first half of 1998
is the result of the increase in average bank borrowings
outstanding, and a slight increase in average interest rates.

Cautionary Statement for Purposes of the "Safe Harbor" Provisions
of the Private Securities Litigation Reform Act of 1995

  The foregoing Management's Discussion and Analysis and other
portions of this report on Form 10-Q, contain various "forward-looking
statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Sections 21E of the
Securities Exchange Act of 1934, as amended, which represent the
Company's expectations or beliefs concerning future events,
including the following:  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; the Company's
long-term profitability; and future borrowing capacity.  In
addition, statements containing expressions such as "believes,"
"anticipates" or "expects" used in the Company's periodic reports
on Forms 10-K and 10-Q filed with the SEC are intended to
identify forward-looking statements.  The Company cautions that
these and similar statements included in this report and in
previously filed periodic reports including reports filed on
Forms 10-K and 10-Q are further qualified by important factors
that could cause actual results to differ materially from those  
in the forward-looking statement, including, without limitation,
the following: decline in sales prices for steel products;
increases in the cost of steel scrap; failure to obtain
significant benefits from the Company's completed cost reduction
and productivity improvement programs; increases in pension costs
and funding requirements; increased domestic or foreign steel
competition; future borrowing capacity; and failure of the
Company to implement significant portions of its restructuring
plan.



                              - 11 -<PAGE>
                  
 PART II - OTHER INFORMATION

ITEM 1.     LEGAL PROCEEDINGS.

            None

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K.
            (a)  Exhibits

  (3)(a)    Registrant's Certificate of Incorporation as
            restated October 28, 1996.  (Incorporated by
            reference to Exhibit (3) in Registrant's Quarterly
            Report on Form 10-Q for September 30, 1996.)

  (3)(b)    By-laws of Registrant amended December 19, 1997. 
            (Incorporated by reference to Exhibit (3)(b) in
            Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1997.)

  (4)(a)    Registrant's Loan and Security Agreement dated as
            of September 7, 1994 amended and restated as of
            August 20, 1997.  (Incorporated by reference to
            Exhibit (4)(a) in Registrant's Quarterly Report on
            Form 10-Q for September 30, 1997.)

  (4)(b)    First Amendment dated December 30, 1997 to the
            Company's Restated Loan and Security Agreement. 
            (Incorporated by reference to Exhibit (4)(b) in
            Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1997.)

  (4)(c)    Second Amendment effective March 27, 1998 to the
            Company's Restated Loan and Security Agreement. 
            (Incorporated by reference to Exhibit (4)(c) in
            Registrant's Annual Report on Form 10-K for the
            fiscal year ended December 31, 1997.)

  (10)(a)   Second Amendment to Restated Employment Agreement
            dated as of July 29, 1998, between Laclede Steel
            Company and Michael H. Lane.
  













                              - 12 -<PAGE>

            Instruments with respect to long-term debt issues
            have been omitted where the amount of securities
            authorized under such instruments does not exceed
            10% of the total consolidated assets of the
            Registrant.  Registrant hereby agrees to furnish a
            copy of any such instrument to the Commission upon
            its request.

            (b)  Reports on Form 8-K.

            Form 8-K dated July 30, 1998 reporting on Item 5 -
            Other Events as stated in a Press Release dated
            July 30, 1998 and on Item 7 - Financial
            Statements, Pro Forma Financial Information and
            Exhibits.

            Form 8-K dated August 6, 1998 reporting on Item 1
            - Changes in Control of Registrant


































                              - 13 -<PAGE>







                            SIGNATURES   



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




                      LACLEDE STEEL COMPANY       
                           (Registrant)




                     /s/ Michael H. Lane           
                         Michael H. Lane
                     Vice President - Finance
                     Treasurer and Secretary

                   Duly Authorized Officer and
                   Principal Financial Officer


Date:        August 13, 1998