SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-Q


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

For the quarterly period June 30, 2000
                         -------------

Commission file number 1-3919
                       ------


                     Keystone Consolidated Industries, Inc.
 ------------------------------------------------------------------------------
             (Exact name of registrant as specified in its charter)


          Delaware                                              37-0364250
---------------------------------------------              --------------------
(State or other jurisdiction ofI.R.S. Employer
 incorporation or organization)Identification No.)

  5430 LBJ Freeway, Suite 1740, Three Lincoln Centre, Dallas, TX  75240-2697
------------------------------------------------------------------------------
(Address of principal executive offices)                          (Zip Code)


Registrant's telephone number, including area code:    (972) 458-0028
                                                    --------------------

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

                           Yes   X                            No _____
                               -----

Number of shares of common stock outstanding at August 4, 2000: 10,061,969


<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                                      INDEX


                                                                          Page
                                                                         number

PART I.  FINANCIAL INFORMATION

  Item 1.         Financial Statements

                  Consolidated Balance Sheets - December 31, 1999
                   and June 30, 2000                                       3-4

                  Consolidated Statements of Operations - Three months
                   and six months ended June 30, 1999 and 2000               5

                  Consolidated Statements of Cash Flows - Six months
                   ended June 30, 1999 and 2000                              6

                  Consolidated Statement of Stockholders' Equity - Six
                   months ended June 30, 2000                                7

                  Notes to Consolidated Financial Statements              8-13

  Item 2.         Management's Discussion and Analysis of Financial
                   Condition and Results of Operations                   14-21

PART II. OTHER INFORMATION

  Item 1.         Legal Proceedings                                         22

  Item 4.         Submission of Matters to a Vote of Security Holders       22

  Item 6.         Exhibits and Reports on Form 8-K                          22


<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                           CONSOLIDATED BALANCE SHEETS

                                 (In thousands)
<TABLE>
<CAPTION>


                                                     December 31,     June 30,
                 ASSET                                  1999            2000
                                                     -----------      --------

Current assets:
<S>                                                    <C>           <C>
  Notes and accounts receivable .................      $ 32,010      $ 43,593
  Receivable from Alter Recycling Company, L.L.C            809           716
  Inventories ...................................        66,083        55,270
  Deferred income taxes .........................        17,396        15,999
  Prepaid expenses and other ....................         1,364           401
                                                       --------      --------

     Total current assets .......................       117,662       115,979
                                                       --------      --------

Property, plant and equipment ...................       357,877       362,560
Less accumulated depreciation ...................       207,721       214,843
                                                       --------      --------

     Net property, plant and equipment ..........       150,156       147,717
                                                       --------      --------

Other assets:
  Restricted investments ........................         9,180         9,186
  Prepaid pension cost ..........................       126,126       127,597
  Deferred financing costs ......................         3,034         2,910
  Goodwill ......................................         1,002           939
  Deferred income taxes .........................          --           3,697
  Investment in Alter Recycling Company, L.L.C ..           281            29
  Other .........................................         3,477         3,173
                                                       --------      --------

     Total other assets .........................       143,100       147,531
                                                       --------      --------

                                                       $410,918      $411,227
                                                       ========      ========
</TABLE>

<PAGE>
                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                     CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)

<TABLE>
<CAPTION>

                                                      December 31,     June 30,
   LIABILITIES AND STOCKHOLDERS' EQUITY                  1999            2000
                                                      ----------       --------

Current liabilities:
<S>                                                    <C>            <C>
  Notes payable and current maturities of
    long-term debt ..............................      $ 45,986       $ 54,854
  Accounts payable ..............................        30,689         35,145
  Accounts payable to affiliates ................            70           --
  Accrued OPEB cost .............................         9,500          9,500
  Other accrued liabilities .....................        45,337         39,970
                                                       --------       --------

      Total current liabilities .................       131,582        139,469
                                                       --------       --------

Noncurrent liabilities:
  Long-term debt ................................       100,871        100,491
  Accrued OPEB cost .............................        98,802         98,357
  Deferred income taxes .........................         1,100           --
  Negative goodwill .............................        22,709         22,031
  Other .........................................         9,539          9,024
                                                       --------       --------

      Total noncurrent liabilities ..............       233,021        229,903
                                                       --------       --------

Minority interest ...............................          --               58
                                                       --------       --------

Stockholders' equity:
  Common stock ..................................        10,656         10,792
  Additional paid-in capital ....................        52,398         53,071
  Accumulated deficit ...........................       (16,727)       (22,054)
  Treasury stock, at cost .......................           (12)           (12)
                                                       --------       --------

      Total stockholders' equity ................        46,315         41,797
                                                       --------       --------

                                                       $410,918       $411,227
                                                       ========       ========
</TABLE>

<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF OPERATIONS

                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                            Three months ended     Six months ended
                                                June 30,               June 30,
                                          ---------------------   ------------------
                                           1999         2000       1999         2000
                                           ----         ----       ----         ----

Revenues and other income:
<S>                                       <C>         <C>         <C>         <C>
  Net sales ............................  $105,924    $ 95,382    $197,641    $191,804
  Interest .............................       107         139         189         265
  Other, net ...........................       192         (61)        313         (39)
                                          --------    --------    --------    --------
                                           106,223      95,460     198,143     192,030
                                          --------    --------    --------    --------

Costs and expenses:
  Cost of goods sold ...................    93,484      91,515     177,147     181,496
  Selling ..............................     2,107       1,714       3,910       3,514
  General and administrative ...........     5,104       4,244      11,185       9,268
  Overfunded defined benefit pension
   credit ..............................    (1,500)       (736)     (4,000)     (1,472)
  Interest .............................     3,529       3,897       7,045       7,610
                                          --------    --------    --------    --------
                                           102,724     100,634     195,287     200,416
                                          --------    --------    --------    --------

                                             3,499      (5,174)      2,856      (8,386)

Equity in losses of Alter Recycling
  Company, L.L.C .......................      --          (221)       --          (252)
                                          --------    --------    --------    --------

   Income (loss) before income ta ......     3,499      (5,395)      2,856      (8,638)

Provision (benefit) for income ta ......       918      (2,049)        623      (3,369)

Minority interest in after-tax
  earnings .............................       102          49         102          58
                                          --------    --------    --------    --------

   Net income (loss) ...................  $  2,479    $ (3,395)   $  2,131    $ (5,327)
                                          ========    ========    ========    ========

Net income (loss) per share:
  Basic ................................  $    .25    $   (.34)   $    .21    $   (.53)
                                          ========    ========    ========    ========
  Diluted ..............................  $    .25    $   (.34)   $    .21    $   (.53)
                                          ========    ========    ========    ========

Weighted average common and common
 equivalent shares outstanding:
  Basic ................................     9,927      10,062       9,882      10,017
                                          ========    ========    ========    ========
  Diluted ..............................     9,927      10,062       9,882      10,017
                                          ========    ========    ========    ========

</TABLE>




<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     Six months ended June 30, 1999 and 2000
                                 (In thousands)

<TABLE>
<CAPTION>

                                                          1999         2000
                                                          ----         ----

Cash flows from operating activities:
<S>                                                     <C>        <C>
  Net income (loss) ..................................  $  2,131   $ (5,327)
  Depreciation and amortization ......................    11,865      9,207
  Amortization of deferred financing costs ...........       260        239
  Deferred income taxes ..............................     1,865     (3,401)
  Other, net .........................................    (2,572)      (141)
  Change in assets and liabilities:
    Accounts receivable ..............................    (7,862)   (11,633)
    Inventories ......................................       275     10,813
    Prepaid pension cost .............................    (4,000)    (1,472)
    Accounts payable .................................       249      4,386
    Other, net .......................................     1,779     (3,697)
                                                        --------   --------

      Net cash provided (used) by operating activities     3,990     (1,026)
                                                        --------   --------

Cash flows from investing activities:
  Capital expenditures ...............................   (10,498)    (7,449)
  Other, net .........................................       (53)       (13)
                                                        --------   --------

      Net cash used by investing activities ..........   (10,551)    (7,462)
                                                        --------   --------

Cash flows from financing activities:
  Revolving credit facilities, net ...................     7,124      9,161
  Other notes payable and long-term debt:
    Additions ........................................       210         27
    Principal payments ...............................      (773)      (700)
                                                        --------   --------

      Net cash provided by financing activities ......     6,561      8,488
                                                        --------   --------

Net change in cash and cash equivalents ..............      -          -

Cash and cash equivalents, beginning of period .......      -          -
                                                        --------   --------

Cash and cash equivalents, end of period .............  $   -      $   -
                                                        ========   ========

Supplemental disclosures:
  Cash paid for:
    Interest, net of amount capitalized ..............  $  6,808   $  7,383
    Income tax refund received .......................      (651)      (636)

  Common stock contributed to employee benefit plan ..  $    722   $    809

</TABLE>



<PAGE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                         Six months ended June 30, 2000
                                 (In thousands)

<TABLE>
<CAPTION>

                                     Additional
                             Common    paid-in    Accumulated Treasury
                              Stock    capital      deficit    stock    Total
                             -------  ---------   -----------  -----  ---------

<S>                          <C>      <C>         <C>          <C>    <C>
Balance - December 31, 1999  $10,656  $   52,398  $  (16,727)  $(12)  $ 46,315

Net loss ..................     --          --        (5,327)   --      (5,327)

Issuance of common stock ..      136         673        --      --         809
                             -------  ----------  ----------   ----   --------

Balance - June 30, 2000 ...  $10,792  $   53,071  $  (22,054)  $(12)  $ 41,797
                             =======  ==========  ==========   ====   ========

</TABLE>





<PAGE>



                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


Note 1 - Organization and basis of presentation:

         The consolidated  balance sheet at December 31, 1999 has been condensed
from the Company's audited  consolidated  financial statements at that date. The
consolidated  balance sheet at June 30, 2000 and the consolidated  statements of
operations and cash flows for the interim  periods ended June 30, 1999 and 2000,
and the consolidated  statement of  stockholders'  equity for the interim period
ended June 30, 2000,  have each been prepared by the Company,  without audit. In
the opinion of management, all adjustments,  consisting only of normal recurring
adjustments,  necessary to present fairly the consolidated  financial  position,
results of  operations  and cash flows  have been  made.  However,  it should be
understood  that  accounting  measurements  at interim dates may be less precise
than at year end.  The results of  operations  for the  interim  periods are not
necessarily  indicative  of the  operating  results for a full year or of future
operations.

         Certain information  normally included in financial statements prepared
in accordance with generally accepted  accounting  principles has been condensed
or omitted. The accompanying consolidated financial statements should be read in
conjunction with the consolidated financial statements included in the Company's
Annual  Report on Form 10-K for the year ended  December  31, 1999 (the  "Annual
Report").

         At June 30, 2000,  Contran  Corporation  ("Contran") and other entities
related to Mr.  Harold C. Simmons,  beneficially  own  approximately  50% of the
Company.  Substantially all of Contran's outstanding voting stock is held either
by trusts  established for the benefit of certain children and  grandchildren of
Mr. Simmons,  of which Mr. Simmons is sole trustee,  or by Mr. Simmons directly.
The Company may be deemed to be controlled by Contran and Mr. Simmons.

         The Company  will adopt  Statement of  Financial  Accounting  Standards
("SFAS") No. 133, Accounting for Derivative  Instruments and Hedging Activities,
as amended,  no later than the first  quarter of 2001.  Under SFAS No. 133,  all
derivatives  will be recognized as either assets or liabilities  and measured at
fair value.  The accounting for changes in fair value of derivatives will depend
upon the intended use of the  derivative.  The impact on the Company of adopting
SFAS No. 133, if any, has not yet been determined but will be dependent upon the
extent  to which the  Company  is a party to  derivative  contracts  or  hedging
activities  covered  by  SFAS  No.  133  at  the  time  of  adoption,  including
derivatives  embedded in  non-derivative  host  contracts.  As  permitted by the
transition  requirements of SFAS No. 133, as amended,  Keystone will exempt from
the scope of SFAS No. 133 all host  contracts  containing  embedded  derivatives
which were acquired or issued prior to January 1, 1999.

         The Company will adopt the Securities and Exchange  Commission's  ("the
SEC")  Staff  Accounting  Bulletin  ("SAB")  No. 101,  Revenue  Recognition,  as
amended,  in the fourth  quarter of 2000.  SAB No. 101 provides  guidance on the
recognition,  presentation and disclosure of revenue, including specifying basic
criteria  that must be met  before  revenue  can be  recognized.  The  impact on
Keystone of adopting SAB No. 101, if any, has not yet been  determined,  in part
because  the SEC is  continuing  to provide  additional  informal  guidance  and
clarification concerning the exact requirements of SAB No. 101. If the impact of
adopting  SAB  No.  101  is  material,  the  Company  will  adopt  SAB  No.  101
retroactively  to the  beginning  of 2000,  and  previously-reported  results of
operations for the first three quarters of 2000 would be restated.
<PAGE>

Note 2 - Inventories:

         Inventories are stated at the lower of cost or market.  At December 31,
1999 and June 30,  2000,  the  last-in,  first-out  ("LIFO")  method was used to
determine  the  cost  of  approximately  79% and  76%,  respectively,  of  total
inventories  and the  first-in,  first-out  or average cost methods were used to
determine the cost of other inventories.
<TABLE>
<CAPTION>

                                                        December 31,    June 30,
                                                           1999          2000
                                                        ------------   --------
                                                             (In thousands)

Raw materials:
<S>                                                      <C>           <C>
  Steel and wire products .............................  $   20,985    $21,358
                                                         ----------    -------

Work in process -
  Steel and wire products .............................      12,657      6,347
                                                         ----------    -------

Finished products:
  Steel and wire products .............................      20,179     17,179
  Lawn and garden products ............................       5,595      3,455
                                                         ----------    -------
                                                             25,774     20,634
                                                         ----------    -------
Supplies:
  Steel and wire products .............................      15,378     15,642
                                                         ----------    -------
                                                             74,794     63,981
                                                         ----------    -------

Less LIFO reserve:
  Steel and wire products .............................       8,711      8,711
                                                         ----------    -------
                                                         $   66,083    $55,270
                                                         ==========    =======
</TABLE>


Note 3 - Notes payable and long-term debt:

<TABLE>
<CAPTION>

                                                        December 31,  June 30,
                                                           1999         2000
                                                        --------     --------
                                                           (In thousands)

<S>                                                     <C>          <C>
9 5/8% Senior Secured Notes, due August 2007            $100,000     $100,000
Commercial credit agreements:
  Revolving credit facilities:
    Keystone ...............................              35,568       45,022
    EWP ....................................               4,908        4,990
    Garden Zone ............................               3,541        3,166
  Term loan - EWP ..........................                 437          146
Other ......................................               2,403        2,021
                                                        --------     --------
                                                         146,857      155,345
  Less current maturities ..................              45,986       54,854
                                                        --------     --------

                                                        $100,871     $100,491
                                                        ========     ========
</TABLE>
<PAGE>


         In June 2000,  EWP renewed and extended its revolving  credit  facility
for two years until June 2002.  Under the terms of the  renewal,  the  revolving
credit  facility was increased  from $6 million to $7 million and the facility's
borrowing base was expanded.

Note 4 - Income taxes:

         Summarized  below are (i) the  differences  between the  provision  for
income taxes or income tax benefit, and the amounts that would be expected using
the U.S.  federal  statutory  income tax rate of 35%, and (ii) the components of
the provision (benefit) for income taxes.

<TABLE>
<CAPTION>

                                                           Six months ended
                                                               June 30,
                                                         ---------------------
                                                         1999            2000
                                                         ----            ----
                                                            (In thousands)

<S>                                                     <C>             <C>
Expected tax expense (benefit), at statutory rate       $ 1,000         $(3,023)
U.S. state income taxes, net                                316            (162)
Amortization of goodwill                                   (217)           (217)
Other, net                                                  476              33
                                                        -------         -------

Income tax provision (benefit)                          $   623         $(3,369)
                                                        =======         =======

Copmprehensive income tax provision (benefit):
  Currently payable (refundable):
    U.S. Federal                                        $(1,354)        $   (22)
    U.S. Sate                                               112              54
                                                        -------         -------

      Net currently payable (refundable)                 (1,242)             32
  Deferred income taxes, net                              1,865          (3,401)
                                                        -------         -------

                                                        $   623         $(3,369)
                                                        =======         =======
</TABLE>

Note 5 - Other accrued liabilities:

<TABLE>
<CAPTION>

                                                        December 31,    June 30,
                                                           1999            2000
                                                        ------------    --------
                                                             (In thousands)

Current:
<S>                                                     <C>             <C>
  Employee benefits                                     $13,181         $11,310
  Environmental                                          10,093          10,073
  Self insurance                                          7,218           7,345
  Interest                                                4,034           4,021
  Disposition of former facilities                          617             303
  Legal and professional                                    829             741
  Accrued maintenance                                      -                557
  Other                                                   9,365           5,620
                                                        -------         -------

                                                        $45,337         $39,970
                                                        =======         =======

Noncurrent:
  Environmental                                         $ 8,143         $ 8,033
  Deferred gain                                             274            -
  Other                                                   1,122             991
                                                        -------         -------

                                                        $ 9,539         $ 9,024
                                                        =======         =======
</TABLE>
<PAGE>

         Keystone generally  undertakes planned major maintenance  activities on
an annual  basis,  usually in the  fourth  quarter  of each  year.  These  major
maintenance  activities are conducted  during a shut-down of the Company's steel
and rod  mills.  Repair  and  maintenance  costs  estimated  to be  incurred  in
connection  with these  planned  major  maintenance  activities  are  accrued in
advance on a straight-line basis throughout the year and are included in cost of
goods sold.

Note 6 - Operations:

         The Company's operations are comprised of two segments; the manufacture
and  sale of  carbon  steel  rod,  wire  and  wire  products  for  agricultural,
industrial,  construction,  commercial,  original  equipment  manufacturers  and
retail consumer markets and the distribution of wire,  plastic and wood lawn and
garden products to retailers through Garden Zone.

         Beginning in August 1999, Keystone is also engaged in a scrap recycling
joint venture through its 50% interest in Alter Recycling  Company,  L.L.C.,  an
unconsolidated equity affiliate.

<TABLE>
<CAPTION>

                                       Three months ended        Six months ended
                                             June 30,                 June 30,
                                       -------------------      ---------------------
                                         1999        2000        1999          2000
                                         ----        ----        ----          ----
                                                     (In thousands)

Revenues:
<S>                                    <C>          <C>         <C>          <C>
  Steel and wire products .........    $ 99,983     $92,807     $189,831     $187,000
  Lawn and garden products ........       7,290       2,671       10,319        4,932
                                       --------     -------     --------     --------
                                        107,273      95,478      200,150      191,932

  Elimination of intersegment
    revenues ......................      (1,349)        (96)      (2,509)        (128)
                                       --------     -------     --------     --------

                                       $105,924     $95,382     $197,641     $191,804
                                       ========     =======     ========     ========

Income (loss) before income taxes:
 Operating profit (loss):
    Steel and wire products .......    $  6,944     $  (870)    $ 10,163     $   (103)
    Lawn and garden products ......         452         199          296          312
                                       --------     -------     --------     --------
                                          7,396        (671)      10,459          209

Equity in losses of Alter
  Recycling Company, L.L.C ........        --          (221)        --           (252)

  General corporate items:
    Interest income ...............         107         139          189          265
    General income (expense), net .        (475)       (745)        (747)      (1,250)
  Interest expense ................      (3,529)     (3,897)      (7,045)      (7,610)
                                       --------     -------     --------     --------

                                       $  3,499     $(5,395)    $  2,856     $ (8,638)
                                       ========     =======     ========     ========

</TABLE>


Note 7 - Contingencies:

         At June 30, 2000, the Company's financial  statements reflected accrued
liabilities  of  $18.1  million  for  estimated   remedial  costs  arising  from
environmental  issues.  There is no assurance  regarding  the  ultimate  cost of
remedial measures that might eventually be required by environmental authorities
or  that  additional   environmental   hazards,   requiring   further   remedial
expenditures,  might not be asserted  by such  authorities  or private  parties.
Accordingly,  the  ultimate  costs of remedial  measures  may exceed the amounts
currently accrued.

         In April 2000, the National  Environmental  Law Center ("the NELC") and
affiliated   public  interest  groups  advised   Keystone,   the  United  States
Environmental Protection Agency and the Illinois Environmental Protection Agency
("the  IEPA") of its intent to file suit against  Keystone in Federal  Court for
allegedly  discharging  excessive  amounts of ammonia into the Illinois River in
violation  of the Clean  Water Act.  Keystone  had been  reporting  the  ammonia
discharges to the IEPA while  attempting to locate the source.  During May 2000,
the Company  believed it had located the source of the ammonia and  remedied the
process that was creating the ammonia.  However,  in June 2000,  Keystone  again
allegedly  discharged an excessive amount of ammonia into the Illinois River. In
June 2000, the State of Illinois served Keystone with a complaint  alleging over
100  discharges  of  ammonia  and zinc into the waters of the state in excess of
permitted limits.  The State of Illinois claims it is without an adequate remedy
at law and will be irreparably injured if the violations continued and, as such,
is requesting preliminary,  and after trial, permanent injunctions. In addition,
the complaint requests civil penalties of $50,000 for each violation and $10,000
for each day during  which each  violation  occurs.  The  Company  continues  to
investigate  the  allegations  and attempt to locate and eliminate the source of
the excessive ammonia.  Until the investigation is complete,  Keystone is unable
to determine if any of the claimed  violations  occurred.  The Company  believes
that in light of the  complaint by the State of Illinois,  the  threatened  NELC
suit will not be filed.

         For additional  information  related to commitments and  contingencies,
see "Management's  Discussion and Analysis of Financial Condition and Results of
Operations" and the Annual Report.



<PAGE>


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

RESULTS OF OPERATIONS:

         Keystone  believes  it is a leading  manufacturer  of  fabricated  wire
products, industrial wire and carbon steel rod for the agricultural, industrial,
construction,  original  equipment  manufacturer  and retail  consumer  markets.
Historically,  the Company has experienced  greater sales and profits during the
first  half of the  year due to the  seasonality  of  sales  in  principal  wire
products markets,  including the agricultural and construction markets. Keystone
is also engaged in the  distribution  of wire,  plastic and wood lawn and garden
products  to  retailers  through its 51%  ownership  interest in Garden Zone LLC
("Garden Zone").

        Beginning  in August 1999,  Keystone is also engaged in scrap  recycling
through its  unconsolidated  50% interest in Alter Recycling
Company, L.L.C. ("ARC").

         As  provided by the safe harbor  provisions  of the Private  Securities
Litigation  Reform Act of 1995, the Company cautions that the statements in this
Quarterly  Report on Form 10-Q relating to matters that are not historical facts
including, but not limited to, statements found in this "Management's Discussion
And  Analysis Of Financial  Condition  And Results Of  Operations,"  are forward
looking statements that represent  management's beliefs and assumptions based on
currently available information. Forward-looking statements can be identified by
the use of words such as "believes," "intends," "may," "should,"  "anticipates,"
"expected" or comparable terminology, or by discussions of strategies or trends.
Although  Keystone believes the expectations  reflected in such  forward-looking
statements are reasonable,  it cannot give  assurances  that these  expectations
will prove to be correct.  Such  statements by their nature involve  substantial
risks and uncertainties that could  significantly  impact expected results,  and
actual  future  results  could differ  materially  from those  described in such
forward-looking  statements.  While it is not  possible to identify all factors,
Keystone continues to face many risks and uncertainties.  Among the factors that
could  cause  actual  future  results  to  differ  materially  are the risks and
uncertainties  discussed in this Quarterly  Report and those described from time
to  time in the  Company's  other  filings  with  the  Securities  and  Exchange
Commission including,  but not limited to, cost of raw materials,  future supply
and demand for the Company's products (including cyclicality thereof),  customer
inventory  levels,   general  economic  conditions,   competitive  products  and
substitute products,  customer and competitor strategies,  the impact of pricing
and production  decisions,  the possibility of labor disruptions,  environmental
matters,  government  regulations  and possible  changes  therein,  the ultimate
resolution of pending  litigation,  successful  implementation  of the Company's
capital improvements plan, international trade policies of the United States and
certain foreign  countries,  and any possible future  litigation and other risks
and  uncertainties  as discussed in this Quarterly Report and the Annual Report,
including without  limitation,  the section referenced above. Should one or more
of these risks  materialize (or the consequences of such a development  worsen),
or should the  underlying  assumptions  prove  incorrect,  actual  results could
differ  materially from those forecasted or expected.  The Company disclaims any
intention  or  obligation  to  update or revise  any  forward-looking  statement
whether as a result of new information, future events or otherwise.


<PAGE>


         The following  table sets forth the  Company's  steel and wire products
production and sales volume data for the periods indicated.

<TABLE>
<CAPTION>

                                           Three months ended  Six months ended
                                                June 30,          June 30,
                                           ------------------  ----------------
                                             1999       2000     1999      2000
                                             ----       ----     ----      ----
                                                 (In thousands of tons)

Production volume:
 Billets:
<S>                                           <C>        <C>      <C>       <C>
  Produced .................... ..........    174        137      328       332
  Purchased ..............................      2          8       30         8
 Rod .....................................    174        150      346       348

Sales volume:
 Fabricated wire products ................     96         94      181       177
 Industrial wire .........................     40         35       78        71
 Steel rod ...............................     57         53      111       133
                                              ---        ---      ---       ---

                                              193        182      370       381
                                              ===        ===      ===       ===

</TABLE>

         The  following  table sets forth the  components  of the  Company's net
sales for the periods indicated.

<TABLE>
<CAPTION>

                                        Three months ended   Six months ended
                                              June 30,             June 30,
                                        ------------------  ------------------
                                          1999      2000      1999      2000
                                          ----      ----      ----      ----
                                                   (In millions)

Steel and wire products:
<S>                                     <C>       <C>       <C>       <C>
  Fabricated wire products .........    $   65.8  $   62.3  $  124.6  $  118.5
  Industrial wire ..................        18.3      15.9      35.9      32.0
  Rod ..............................        15.4      14.1      28.6      35.7
  Other ............................          .5        .5        .7        .8
                                        --------    ------    ------    ------
                                           100.0      92.8     189.8     187.0

Lawn and garden products ...........         5.9       2.6       7.8       4.8
                                        --------    ------    ------    ------

                                        $  105.9  $   95.4  $  197.6  $  191.8
                                        ========    ======    ======    ======

</TABLE>



<PAGE>


         The following  table sets forth selected  operating data of the Company
as a percentage of net sales for the periods indicated.

<TABLE>
<CAPTION>


                                      Three months ended      Six months ended
                                            June 30,                June 30,
                                      ------------------    --------------------
                                         1999      2000        1999        2000
                                         ----      ----        ----        ----

<S>                                      <C>        <C>        <C>        <C>
Net sales .........................      100.0%     100.0%     100.0%     100.0%
Cost of goods sold ................       88.3       95.9       89.6       94.6
                                       -------      -----      -----      -----
Gross profit ......................       11.7        4.1       10.4        5.4
Selling expenses ..................        2.0        1.8        2.0        1.8
General and administrative expenses        4.8        4.4        5.7        4.8
Overfunded defined benefit pension
 credit ...........................       (1.4)       (.8)      (2.0)       (.8)

Income (loss) before income taxes .        3.3%      (5.7)%      1.5%      (4.5)%
Income tax provision (benefit) ....         .9       (2.1)        .3       (1.8)
Minority interest in after-tax
  earnings ........................         .1        -           .1        -
                                       -------      -----      -----      -----

Net income (loss) .................        2.3%      (3.6)%      1.1%      (2.7)%
                                       =======      =====      =====      =====
</TABLE>

         Billet  production  during the second  quarter of 2000 declined  37,000
tons or 21% to 137,000 tons from 174,000 tons during the second quarter of 1999.
The primary  reasons  for this  decline  were the  extended  outage  incurred in
connection  with  the  correction  of the  infrastructure  problems  related  to
Keystone's   capital   improvements  that  were  completed  during  1998  and  a
"break-out"  that  occurred at the  Company's  electric arc furnace  during June
2000. Due to the decline in billet production,  Keystone purchased 8,000 tons of
billets  during the 2000 second  quarter as compared to  purchases of 2,000 tons
during the 1999 second quarter. As a result of the decline in billet production,
and despite the increased  billet  purchases,  rod production  during the second
quarter of 2000  declined to 150,000 tons as compared to  production  of 174,000
tons in the 1999 second quarter.

         Despite lower production  levels during the second quarter,  billet and
rod production  during the first six months of 2000 both  increased  slightly as
compared to the first six months of 1999.  These  increases were due to the high
levels of production  during the first quarter of 2000. Billet production in the
first six months of 2000 increased  4,000 tons from  production in the first six
months of 1999 and rod  production  in the first  six  months of 2000  increased
2,000 tons from production in the first six months of 1999.

         As a result of improvements  made to Keystone's  steel mill during 1998
and 1999, billet production  capacity is 1 million tons.  However,  through June
2000 the Company was limited by its  Illinois  Environmental  Protection  Agency
(the "IEPA)  construction  permit to annual  billet  production of 820,000 tons.
Keystone applied for  modifications to its permit to allow billet  production of
the 1 million  ton  capacity  and in June  2000,  the IEPA  issued  the  permit.
Issuance of the permit allows Keystone to now produce 1 million tons of billets,
the capacity of its furnace.  Although the  Company's rod mill has a capacity of
only  approximately  800,000 tons,  Keystone has developed  several options that
will  allow it to sell  any  excess  billet  production  into  the  marketplace.
Keystone currently intends to attempt to operate the furnace at its capacity.

         Net sales of $95.4  million in the 2000  second  quarter  were down 10%
from $105.9  million  during the same period in 1999.  This decline in sales was
due  primarily  to a 6% decline in  shipments  of the  Company's  steel and wire
products  combined with a 2% decline in overall  per-ton product selling prices.
In addition,  Garden Zone's sales during the 2000 second  quarter were down $3.3
million  from the 1999 second  quarter to $2.6  million  primarily  due to lower
shipments to a major customer.  The production  outages in Keystone's steel mill
during the second quarter of 2000 were  responsible for the lower steel and wire
product  shipment  levels  during the 2000 second  quarter.  Shipments of carbon
steel rod  declined  8% during the 2000  second  quarter as compared to the 1999
second  quarter  while  per-ton  selling  prices  declined 1%.  Industrial  wire
shipments declined 11% while per-ton selling prices declined 2%. Fabricated wire
products shipments during the 2000 second quarter declined 2% as compared to the
1999 second quarter while per-ton selling prices declined 3%.

         Net sales of $191.8  million  in the first six months of 2000 were down
3% from $197.6  million in the first six months of 1999.  This  decline in sales
was  primarily  due to a 2% decline in per-ton  selling  prices of the Company's
steel and wire  products  partially  offset by a 3%  increase in  shipments.  In
addition, Garden Zone's sales during the first six months of 2000 were down $3.0
million from the same period in 1999 to $4.8 million  primarily due to the lower
shipments to the major customer.  Despite lower steel and wire product shipments
during the 2000 second quarter,  higher  shipments during the 2000 first quarter
resulted in the higher product  shipments during the first six months of 2000 as
compared to the first six months of 1999.  Carbon steel rod shipments  increased
20% during  the first six months of 2000  compared  to the 1999  second  quarter
while per-ton selling prices increased 4%. Industrial wire shipments declined 9%
while per-ton  selling prices declined 3%.  Fabricated  wire products  shipments
during the first six months of 2000  declined  3% as  compared  to the first six
months of 1999 while per-ton selling prices declined 2%.

         Gross profit  during the 2000 second  quarter  declined to $3.9 million
from $12.4  million in the 1999 second  quarter as the  Company's  gross  margin
declined from 11.7% in the 1999 period to 4.1% in the 2000 second quarter.  This
decrease in gross  margin was due  primarily  to higher  costs for scrap  steel,
Keystone's primary raw material,  the lower overall per-ton selling price of the
Company's  products  and  higher  production  costs due to  extended  production
outages  caused by planned  repairs and the furnace  break-out.  During the 2000
second quarter,  the Company purchased 197,000 tons of scrap at an average price
of $104 per ton as compared to 1999 second quarter  purchases of 224,000 tons at
an  average  price of $88 per ton.  During  the 1999  second  quarter,  Keystone
purchased 2,000 tons of billets at an average price of $187 per ton, as compared
to 8,000 tons in the 2000  second  quarter at an average  price of $215 per ton.
The second  quarter  production  outages  and the  furnace  break-out  adversely
impacted  gross  profit by  approximately  $3.6  million  including  lost billet
production of 39,000 tons.

         Gross  profit  during  the first six months of 2000  declined  to $10.3
million  from $20.5  million  in the first six  months of 1999 as the  Company's
gross  margin  declined  from 10.4% in the 1999  period to 5.4% in the first six
months of 2000.  This  decrease in gross margin was also due primarily to higher
costs for scrap steel,  the lower overall per-ton selling price of the Company's
products and higher production  costs.  During the first six months of 2000, the
Company  purchased  390,000 tons of scrap at an average price of $108 per ton as
compared to 1999  purchases of 336,000 tons at an average  price of $85 per ton.
During the first six months of 1999,  Keystone  purchased 30,000 tons of billets
at an  average  price of $198 per ton,  as  compared  to 8,000 in the  first six
months of 2000 at an average price of $215 per ton. The  production  outages and
furnace  break-out during the first six months of 2000 adversely  impacted gross
profit by $5.3 million including lost billet production of 64,000 tons.

         Selling  expenses of $1.7 million during the second quarter of 2000 and
$3.5  million  during  the  first six  months  of 2000  were both  approximately
$400,000 lower than the same periods in 1999, but were relatively  constant as a
percentage of sales.

         General and administrative expenses declined to $4.2 million during the
second  quarter of 2000 as compared to $5.1 million during the second quarter of
1999 primarily due to higher administrative expenses associated with start-up of
Garden Zone and an unfavorable legal settlement,  both during the second quarter
of 1999.  During the first half of 2000,  general  and  administrative  expenses
amounted to $9.3 million as compared to $11.2  million  during the first half of
1999,  also  primarily due to the higher costs  associated  with the start-up of
Garden Zone and unfavorable legal settlements during the 1999 period.

         The overfunded  defined benefit pension credit in the second quarter of
2000 was $736,000 as compared to $1.5 million in the second  quarter of 1999 and
was $1.5 million during the first six months of 2000 as compared to $4.0 million
during the same  period in 1999.  These  declines  in the  pension  credit  were
primarily a result of the increased  pension benefits  included in the Company's
May 1999 labor contract with the Peoria  facility's  union.  Keystone  currently
anticipates  the total 2000  overfunded  defined  benefit  pension  credit  will
approximate $3.0 million as compared to a total credit in 1999 of $5.6 million.

         Interest  expense  in the second  quarter  of 2000 was higher  than the
second quarter of 1999 due  principally to higher average  borrowing  levels and
higher  interest  rates.  Average  borrowings by the Company under its revolving
credit facilities,  EWP term loan and Senior Secured Notes  approximated  $152.2
million  in the  second  quarter of 2000 as  compared  to $143.6  million in the
second quarter of 1999.  During the second quarter of 2000, the average interest
rate paid by the Company was 9.6% per annum as compared to 9.1% per annum in the
second quarter of 1999.

         Interest  expense  in the first half of 2000 was also  higher  than the
first  half of 1999 due  principally  to  higher  borrowing  levels  and  higher
interest  rates.  Average  borrowings by the Company under its revolving  credit
facilities,  EWP term loan and Senior Secured Notes approximated  $151.4 million
in the first  half of 2000 as  compared  to $142.9  million in the first half of
1999.  During  the first half of 2000,  the  average  interest  rate paid by the
Company  was 9.5% per annum as  compared  to 9.3% per annum in the first half of
1999.

         The  principal  reasons for the  difference  between  the U.S.  federal
statutory  income  tax rate and the  Company's  effective  income  tax rates are
explained in Note 4 to the Consolidated Financial Statements.
         As a result of the items discussed  above,  the Company  incurred a net
loss during the second quarter of 2000 of $3.4 million as compared to net income
of $2.5 million in the second  quarter of 1999,  and a net loss during the first
half of 2000 of $5.3  million as compared  to net income of $2.1  million in the
first half of 1999.

         During  December 1998,  Keystone  completed the  installation  of a new
electric  arc furnace at its steel  mill.  The  Company  experienced  production
problems  related to the  start-up  of the new furnace  throughout  1999 and the
first half of 2000.  These problems were  identified  during 1999.  Keystone had
previously  believed the problems  would have been  resolved,  and the equipment
performing  at  desired  levels,  during  the first  quarter  of 2000.  However,
Keystone currently believes the production problems were not corrected until May
2000.

         Keystone  enacted a $12 per-ton  increase in rod selling prices for all
shipments ordered after April 1, 2000 and believes such price increase was fully
implemented by July 1, 2000. The Company also enacted a $12 per-ton  increase in
industrial  wire selling prices for all orders after May 1, 2000. At the present
time, the industrial  wire price increase has not been fully  realized.  Despite
strong market demand and increased selling prices, management currently believes
the  Company  will  record a loss during the second half of 2000 due to expected
increasing  scrap costs and lower sales volumes as a result of lower than normal
inventory levels due to the delay in resolving the production problems discussed
above and the break-out at Keystone's electric arc furnace in June.

LIQUIDITY AND CAPITAL RESOURCES:

         The Company's cash flows from operating  activities are affected by the
seasonality  of  its  business  as  sales  of  certain   products  used  in  the
agricultural and construction industries are typically highest during the second
quarter  and  lowest  during the fourth  quarter  of each year.  These  seasonal
fluctuations  impact  the timing of  production,  sales and  purchases  and have
typically  resulted  in a use of  cash  from  operations  and  increases  in the
outstanding  balance under the Company's  revolving credit facilities during the
first quarter of each year.

         At June 30,  2000 the  Company had  negative  working  capital of $23.5
million,  including  $1.7  million of notes  payable and current  maturities  of
long-term debt as well as outstanding  borrowings under the Company's  revolving
credit  facilities of $53.2 million.  The amount of available  borrowings  under
these  revolving  credit  facilities is based on  formula-determined  amounts of
trade  receivables and  inventories,  less the amount of outstanding  letters of
credit.  Under the terms of the indenture related to the Company's 9 5/8% Senior
Secured  Notes,   Keystone's  ability  to  borrow  under  its  revolving  credit
facilities  may be  limited.  At June 30,  2000,  unused  credit  available  for
borrowing under Keystone's $60 million revolving credit facility,  which expires
December 31, 2001, EWP's $7 million  revolving  credit  facility,  which expires
June 30, 2002, and Garden Zone's $4 million  revolving  credit  facility,  which
expires  December  11, 2000 were $13.9  million,  $2.0  million and $.3 million,
respectively.  The terms of the indenture will permit  Keystone to borrow all of
the unused credit  available under its revolving  credit  facilities  during the
third quarter of 2000. Keystone's $60 million revolving credit facility requires
daily cash receipts be used to reduce outstanding  borrowings,  which results in
the Company  maintaining zero cash balances when there are balances  outstanding
under this credit facility.

         During the first half of 2000, the Company's operating  activities used
approximately  $1.0  million  of cash  compared  to  $4.0  million  provided  by
operations in the first half of 1999  principally  due to lower  earnings in the
2000 period.

         During the first half of 2000, the Company made capital expenditures of
$7.4  million as  compared  to $10.5  million in the 1999  first  half.  Capital
expenditures for 2000 are currently  estimated to be approximately $14.0 million
and are related  primarily to upgrades of  production  equipment.  These capital
expenditures  will be funded  using  cash flows from  operations  together  with
borrowing availability under Keystone's revolving credit facilities.

         At June 30, 2000, the Company's financial  statements reflected accrued
liabilities  of $18.1  million for  estimated  remediation  costs  arising  from
environmental  issues.  There is no assurance  regarding  the  ultimate  cost of
remedial measures that might eventually be required by environmental authorities
or  that  additional   environmental   hazards,   requiring   further   remedial
expenditures,  might not be asserted  by such  authorities  or private  parties.
Accordingly, the costs of remedial measures may exceed the amounts accrued.

         Keystone incurs  significant  ongoing costs for plant and equipment and
substantial employee medical benefits for both current and retired employees. As
such,  the Company is vulnerable  to business  downturns and increases in costs,
and accordingly, routinely compares its liquidity requirements and capital needs
against its estimated  future operating cash flows. As a result of this process,
the Company has in the past, and may in the future,  reduce  controllable costs,
modify  product  mix,  acquire and dispose of  businesses,  restructure  certain
indebtedness,  and raise  additional  equity capital.  Keystone will continue to
evaluate the need for similar  actions or other  measures in the future in order
to meet its obligations.  The Company also routinely  evaluates  acquisitions of
interests in, or combinations  with,  companies related to the Company's current
businesses.  Keystone  intends to consider  such  acquisition  activities in the
future and, in connection with this activity,  may consider  issuing  additional
equity  securities  or  increasing  the  indebtedness  of the Company.  However,
Keystone's  ability to incur new debt in the future will be limited by the terms
of the indenture related to the 9 5/8% Senior Secured Notes.

         Management  currently believes the cash flows from operations  together
with the funds available under the Company's revolving credit facilities will be
sufficient  to  fund  the  anticipated  needs  of  its  operations  and  capital
improvements  for the year ending  December 31, 2000.  This belief is based upon
management's assessment of various financial and operational factors, including,
but not limited to, assumptions  relating to product shipments,  product mix and
selling  prices,  production  schedules,   productivity  rates,  raw  materials,
electricity,  labor,  employee  benefits  and other  fixed and  variable  costs,
interest rates, repayments of long-term debt, capital expenditures and available
borrowings under the Company's revolving credit facilities. However, liabilities
under  environmental  laws and  regulations  with  respect to the  clean-up  and
disposal  of  wastes,  or any  significant  increases  in the cost of  providing
medical  coverage to active and retired  employees could have a material adverse
effect on the future liquidity, financial condition and results of operations of
the  Company.  Additionally,  significant  declines  in the  Company's  end user
markets or market share, the inability to maintain  satisfactory  billet and rod
production levels, or other unanticipated costs, if significant, could result in
a need for funds greater than the Company currently has available.  There can be
no  assurance  the  Company  would  be able to  obtain  an  adequate  amount  of
additional financing.

ACCOUNTING PRINCIPLES NOT YET ADOPTED:

         See Note 1 to the Consolidated Financial Statements.




<PAGE>


PART II.  OTHER INFORMATION

ITEM 1. Legal Proceedings

        Reference  is made to  disclosure  provided  under the caption  "Current
litigation" in Note 15 to the Consolidated  Financial Statements included in the
Annual Report.


ITEM 4. Submission of Matters to a Vote of Security Holders
        ---------------------------------------------------

        On May 16, 2000, the annual meeting of the  stockholders of Keystone was
held for the purpose of voting to elect one director for a term of two years and
two directors for terms of three years.

        Results of voting at the annual meeting are detailed  below  (10,160,186
common shares were entitled to vote at the meeting).
<TABLE>
<CAPTION>

                                                For      Withheld     Total
                                             ---------   --------   ---------

Directors:
Two-year term
<S>                                          <C>          <C>       <C>
Steven L. Watson ........................    6,927,431    48,097    6,975,528


Three-year term
Thomas E. Barry .........................    6,925,336    50,192    6,975,528
William P. Lyons, Jr ....................    6,925,189    50,339    6,975,528
William Spier ...........................    6,926,311    49,217    6,975,528
</TABLE>


ITEM 6. Exhibits and Reports on Form 8-K
        --------------------------------

(a)     The following exhibit is included herein:

        27.1    Financial Data Schedule for the six month period ended
                June 30, 2000.

(b)     Reports on Form 8-K filed during the quarter ended June 30, 2000:

        None.


<PAGE>





                               S I G N A T U R E S



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.


                                         Keystone Consolidated Industries, Inc.
                                         --------------------------------------
                                                     (Registrant)



Date:  August 8, 2000                    By /s/Bert E. Downing, Jr.
                                         ------------------------------------
                                         Bert E. Downing, Jr.
                                         Vice President and Corporate Controller
                                           (Principal Financial and Accounting
                                              Officer)