| For      the quarter ended March 31,      2008 | Commission      file number 1-3919 |
|------------------------------------------------|------------------------------------|

| Keystone      Consolidated Industries, Inc.                |
|------------------------------------------------------------|
| (Exact      name of Registrant as specified in itscharter) |

| Delaware                                                                |   | 37-0364250                                 |
|-------------------------------------------------------------------------|--------|--------------------------------------------|
| (State      or other jurisdiction ofIncorporation      or organization) |   | (IRS      EmployerIdentification      No.) |

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

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

----

| Part      I.  FINANCIAL INFORMATION                                                                                                                                    |  Page  |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|------------------|
|                                                                                                                                                                        |             |
| Item      1.  Financial Statements                                                                                                                                     |             |
|                                                                                                                                                                        |             |
| Condensed      Consolidated Balance Sheets –   December 31, 2007;      March 31, 2008 (unaudited)                                                      | 3                |
|                                                                                                                                                                        |             |
| Condensed      Consolidated Statements of Operations (unaudited) -  Three      months ended March 31, 2007 and 2008                                               | 5                |
|                                                                                                                                                                        |             |
| Condensed      Consolidated Statements of Cash Flows (unaudited) – Three      months ended March 31, 2007 and 2008                                               | 6                |
|                                                                                                                                                                        |             |
| Condensed      Consolidated Statement of Stockholders' Equity and      Comprehensive Income -  Three months ended  March      31, 2008 (unaudited) | 7                |
|                                                                                                                                                                        |             |
| Notes      to Condensed Consolidated Financial Statements (unaudited)                                                                                                       | 8                |
|                                                                                                                                                                        |             |
| Item      2. Management's Discussion and Analysis of Financial Condition      and Results of Operations                                                                | 16               |
|                                                                                                                                                                        |             |
| Item      3. Quantitative and Qualitative Disclosures About Market    Risk                                                                                                  | 26               |
|                                                                                                                                                                        |             |
| Item      4. Controls and Procedures                                                                                                                                        | 26               |
|                                                                                                                                                                        |             |
| PART      II. OTHER INFORMATION                                                                                                                                             |             |
|                                                                                                                                                                        |             |
| Item      1. Legal Proceedings                                                                                                                                              | 28               |
|                                                                                                                                                                        |             |
| Item      1A. Risk Factors                                                                                                                                                  | 28               |
|                                                                                                                                                                        |             |
| Item      4. Submission of Matters to a Vote of SecurityHolders                                                                                                        | 28               |
|                                                                                                                                                                        |             |
| Item      6. Exhibits                                                                                                                                                       | 28               |
|                                                                                                                                                                        |             |
| Items      2, 3 and 5 of Part II are omitted because there is no information to      report.                                                                                |             |

----

|                                                           |   | December      31, |    |   | March      31, |   |
|----------------------------------------------------------------|--------|-------------------|---------|--------|----------------|--------|
| ASSETS                                                         |   | 2007              |    |   | 2008           |   |
|                                                           |   |              |    |   | (unaudited)    |   |
|                                                           |   |              |    |   |           |   |
| Current      assets:                                           |   |              |    |   |           |   |
|   Accounts      receivable, net                      |   | $                 | 54,891  |   |           | $      | 68,234 |   |
|   Inventories                                        |   |              | 53,551  |   |           |   | 50,021 |   |
|   Deferred      income taxes                         |   |              | 10,055  |   |           |   | 10,055 |   |
|   Prepaid      expenses and other                    |   |              | 2,465   |   |           |   | 1,876 |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Total      current assets              |   |              | 120,962 |   |           |   | 130,186 |   |
|                                                           |   |              |    |   |           |   |   |   |
| Property,      plant and equipment:                            |   |              |    |   |           |   |   |   |
|   Land                                               |   |              | 1,272   |   |           |   | 1,236 |   |
|   Buildings      and improvements                    |   |              | 58,946  |   |           |   | 58,666 |   |
|   Machinery      and equipment                       |   |              | 315,874 |   |           |   | 316,601 |   |
|   Construction      in progress                      |   |              | 3,675   |   |           |   | 4,454 |   |
|                                                           |   |              | 379,767 |   |           |   | 380,957 |   |
|   Less      accumulated depreciation                 |   |              | 287,298 |   |           |   | 290,806 |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Net      property, plant and equipment |   |              | 92,469  |   |           |   | 90,151 |   |
|                                                           |   |              |    |   |           |   |   |   |
| Other      assets:                                             |   |              |    |   |           |   |   |   |
|   Restricted      investments                        |   |              | 2,245   |   |           |   | 2,260 |   |
|   Pension      asset                                 |   |              | 545,656 |   |           |   | 562,264 |   |
|   Other,      net                                    |   |              | 1,691   |   |           |   | 1,450 |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Total      other assets                |   |              | 549,592 |   |           |   | 565,974 |   |
|                                                           |   |              |    |   |           |   |   |   |
|                                                           |   |              |    |   |           |   |   |   |
|     Total      assets                      |   | $                 | 763,023 |   |           | $      | 786,311 |   |
|                                                           |   |              |    |   |           |   |   |   |

----

| LIABILITIES      AND STOCKHOLDERS' EQUITY                                                                                                                                                                                                              |   | December      31, |    |   | March      31, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|---------|--------|----------------|--------|
|                                                                                                                                                                                                                                                   |   | 2007              |    |   | 2008           |   |
|                                                                                                                                                                                                                                                   |   |              |    |   | (unaudited)    |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |
| Current      liabilities:                                                                                                                                                                                                                              |   |              |    |   |           |   |
|   Notes      payable and current maturities of long-term      debt                                                                                                                                                                      |   | $                 | 62,175  |   |           | $      | 56,825 |   |
|   Accounts      payable                                                                                                                                                                                                                      |   |              | 14,078  |   |           |   | 12,161 |   |
|   Accrued      OPEB cost                                                                                                                                                                                                                     |   |              | 4,482   |   |           |   | 4,482 |   |
|   Other      accrued liabilities                                                                                                                                                                                                             |   |              | 19,597  |   |           |   | 20,230 |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
|     Total      current liabilities                                                                                                                                                                                                 |   |              | 100,332 |   |           |   | 93,698 |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
| Noncurrent      liabilities:                                                                                                                                                                                                                           |   |              |    |   |           |   |   |   |
|   Long-term      debt                                                                                                                                                                                                                        |   |              | 29,402  |   |           |   | 18,613 |   |
|   Accrued      OPEB cost                                                                                                                                                                                                                     |   |              | 27,167  |   |           |   | 26,787 |   |
|   Deferred      income taxes                                                                                                                                                                                                                 |   |              | 194,728 |   |           |   | 200,965 |   |
|   Other      accrued liabilities                                                                                                                                                                                                             |   |              | 6,700   |   |           |   | 6,458 |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
|     Total      noncurrent liabilities                                                                                                                                                                                              |   |              | 257,997 |   |           |   | 252,823 |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
| Stockholders'      equity:                                                                                                                                                                                                                             |   |              |    |   |           |   |   |   |
|   Common      stock $.01 par value; 11,000,000 shares authorized and 10,000,000 shares      issued at December 31, 2007;      20,000,000      shares authorized and 12,500,000 shares issued at March 31,      2008 |   |              | 100     |   |           |   | 125 |   |
|   Additional      paid-in capital                                                                                                                                                                                                            |   |              | 75,423  |   |           |   | 100,111 |   |
|   Accumulated      other comprehensive income                                                                                                                                                                                                |   |              | 215,462 |   |           |   | 212,235 |   |
|   Retained      earnings                                                                                                                                                                                                                     |   |              | 114,505 |   |           |   | 128,115 |   |
|   Treasury      stock                                                                                                                                                                                                                        |   |              | (796    | )      |           |   |  (796 | ) |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
|     Total      stockholders' equity                                                                                                                                                                                                |   |              | 404,694 |   |           |   | 439,790 |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |
|     Total      liabilities and stockholders’ equity                                                                                                                                                                          |   | $                 | 763,023 |   |           | $      | 786,311 |   |
|                                                                                                                                                                                                                                                   |   |              |    |   |           |   |   |   |

----

|                                                                  |   | Three      months ended  March 31,  |         |
|-----------------------------------------------------------------------|--------|----------------------------------------------------|--------------|
|                                                                  |   | 2007                                               |         |   | 2008 |   |
|                                                                  |   | (unaudited)                                        |         |
|                                                                  |   |                                               |         |   |   |   |
| Net      sales                                                        |   | $                                                  | 113,098      |   |   | $ | 134,139 |   |
| Cost      of goods sold                                               |   |                                               | (106,731     | ) |   |   | (127,013 | ) |
|                                                                  |   |                                               |         |   |   |   |   |   |
|   Gross      margin                                         |   |                                               | 6,367        |   |   |   | 7,126 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
| Other      operating income (expense):                                |   |                                               |         |   |   |   |   |   |
|   Selling      expense                                      |   |                                               | (1,678       | ) |   |   | (1,871 | ) |
|   General      and administrative expense                   |   |                                               | (2,976       | ) |   |   | (3,673 | ) |
|   Defined      benefit pension credit                       |   |                                               | 20,378       |   |   |   | 18,996 |   |
|   Other      postretirement benefit credit                  |   |                                               | 2,200        |   |   |   | 2,198 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
|       Total      other operating income |   |                                               | 17,924       |   |   |   | 15,650 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
| Operating      income                                                 |   |                                               | 24,291       |   |   |   | 22,776 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
| Nonoperating      income (expense):                                   |   |                                               |         |   |   |   |   |   |
|   Interest      expense                                     |   |                                               | (1,197       | ) |   |   | (1,313 | ) |
|   Interest      and other income, net                       |   |                                               | 138          |   |   |   | 390 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
|       Total      nonoperating expense   |   |                                               | (1,059       | ) |   |   | (923 | ) |
|                                                                  |   |                                               |         |   |   |   |   |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
|   Income      before income taxes                           |   |                                               | 23,232       |   |   |   | 21,853 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
| Provision      for income taxes                                       |   |                                               |  (8,768 | ) |   |   | (8,243 | ) |
|                                                                  |   |                                               |         |   |   |   |   |   |
|   Net      income                                           |   | $                                                  | 14,464       |   |   | $ | 13,610 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
| Basic      and diluted income per share                               |   | $                                                  | 1.45         |   |   | $ | 1.39 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |
| Basic      and diluted weighted average shares outstanding       |   |                                               |  10,000 |   |   |   |   9,794 |   |
|                                                                  |   |                                               |         |   |   |   |   |   |

----

|                                                                                             |   | Three      months ended  March 31,  |       |
|--------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|------------|
|                                                                                             |   | 2007                                               |       |   | 2008 |   |
|                                                                                             |   | (unaudited)                                        |       |
|                                                                                             |   |                                               |       |   |   |   |
| Cash      flows from operating activities:                                                       |   |                                               |       |   |   |   |
|   Net      income                                                                      |   | $                                                  | 14,464     |   |   | $ | 13,610 |   |
|   Depreciation      and amortization                                                   |   |                                               | 3,876      |   |   |   | 3,949 |   |
|   Deferred      income taxes                                                           |   |                                               | 8,710      |   |   |   | 8,182 |   |
|   Defined      benefit pension credit                                                  |   |                                               | (20,378    | ) |   |   | (18,996 | ) |
|   OPEB      credit                                                                     |   |                                               | (2,200     | ) |   |   | (2,198 | ) |
|   OPEB      payments                                                                   |   |                                               | (1,009     | ) |   |   | (966 | ) |
|   Other,      net                                                                      |   |                                               | 283        |   |   |   | 278 |   |
|   Change      in assets and liabilities (net of acquisition):                          |   |
|     Accounts      receivable                                                 |   |                                               | (31,171    | ) |   |   | (13,336 | ) |
|     Inventories                                                              |   |                                               | 4,225      |   |   |   | 3,530 |   |
|     Accounts      payable                                                    |   |                                               | 1,773      |   |   |   | (1,917 | ) |
|     Other,      net                                                          |   |                                               | 73         |   |   |   | 974 |   |
|                                                                                             |   |                                               |       |   |   |   |   |   |
|       Net      cash used in operating activities                   |   |                                               | (21,354    | ) |   |   | (6,890 | ) |
|                                                                                             |   |                                               |       |   |   |   |   |   |
| Cash      flows from investing activities:                                                       |   |                                               |       |   |   |   |   |   |
|   Capital      expenditures                                                            |   |                                               | (7,617     | ) |   |   | (1,882 | ) |
|   Acquisition      of CaluMetals’ assets                                         |   |                                               | (6,240     | ) |   |   | - |   |
|   Restricted      investments, net                                                     |   |                                               | (112       | ) |   |   | (15 | ) |
|   Other,      net                                                                      |   |                                               |  -    |   |   |   | 360 |   |
|                                                                                             |   |                                               |       |   |   |   |   |   |
|       Net      cash used in investing activities                   |   |                                               | (13,969    | ) |   |   | (1,537 | ) |
|                                                                                             |   |                                               |       |   |   |   |   |   |
| Cash      flows from financing activities:                                                       |   |                                               |       |   |   |   |   |   |
|   Issuance      of common stock                                                        |   |                                               | -          |   |   |   | 24,713 |   |
|   Revolving      credit facilities, net                                                |   |                                               | 42,496     |   |   |   | (6,524 | ) |
|   Other      notes payable and long-term debt:                                         |   |                                               |       |   |   |   |   |   |
|     Additions                                                                |   |                                               | 4,065      |   |   |   | - |   |
|     Principal      payments                                                  |   |                                               | (11,030    | ) |   |   | (9,625 | ) |
|   Deferred      financing costs paid                                                   |   |                                               |  (208 | ) |   |   | (137 | ) |
|                                                                                             |   |                                               |       |   |   |   |   |   |
|       Net      cash provided by financing activities               |   |                                               | 35,323     |   |   |   | 8,427 |   |
|                                                                                             |   |                                               |       |   |   |   |   |   |
| 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                                 |   | $                                                  | 1,038      |   |   | $ | 1,104 |   |
|     Income      taxes, net                                                   |   |                                               | 46         |   |   |   | 78 |   |
|                                                                                             |   |                                               |       |   |   |   |   |   |
|   Non-cash      issuance of debt for acquisition of      CaluMetals’ assets |   |                                               | 781        |   |   |   |  - |   |

----

|                                                                         |   | Common      |    |   | Additionalpaid-in |   |           | Accumulated      other comprehensive income |   |   | Retained  |   |   | Treasury |        |   |   |   |    | Comprehensive |   |
|------------------------------------------------------------------------------|--------|-------------|---------|--------|-------------------|--------|----------------|--------------------------------------------------|--------|--------|-----------|--------|--------|----------|-------------|--------|--------|--------|---------|---------------|--------|
|                                                                         |   | stock       |    |   | capital           |   |           | Pensions                                         |   |   | OPEB      |   |   | earnings |        |   | stock  |   |    | Total         |   |   | income |   |
|                                                                         |   | (unaudited) |    |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |
| Balance      – December 31, 2007                                       |   | $           | 100     |   |              | $      | 75,423         |                                             |   | $      | 164,763   |   |   | $        | 50,699      |   |   | $      | 114,505 |          |   | $ | (796 | ) |   | $ | 404,694 |   |   |   |   |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |
| Net      income                                                              |   |        | -       |   |              |   | -              |                                             |   |   | -         |   |   |     | -           |   |   |   | 13,610  |          |   |   | - |   |   |   | 13,610 |   |   | $ | 13,610 |   |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Issuance      of common stock, net of issuance costs                         |   |        | 25      |   |              |   | 24,688         |                                             |   |   | -         |   |   |     | -           |   |   |   | -       |          |   |   | - |   |   |   | 24,713 |   |   |   |  - |   |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of actuarial  (gains)      losses, net of tax    |   |        |  - |   |              |   |  -        |                                             |   |   | (1,682    | )      |   |     |  1,016 |   |   |   |  - |          |   |   | - |   |   |   | (666 | ) |   |   | (666 | ) |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Amortization      of prior service cost   (credit), net oftax |   |        |  - |   |              |   |    - |                                             |   |   |  191 |   |   |     | (2,752      | )      |   |   |  - |          |   |   |  - |   |   |   | (2,561 | ) |   |   | (2,561 | ) |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance      – March 31, 2008                                          |   | $           | 125     |   |              | $      | 100,111        |                                             |   | $      | 163,272   |   |   | $        | 48,963      |   |   | $      | 128,115 |          |   | $ | (796 | ) |   | $ | 439,790 |   |   |   |   |   |
|                                                                         |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   |   |   |   |
|   Comprehensive      income                                        |   |        |    |   |              |   |           |                                             |   |   |      |   |   |     |        |   |   |   |    |          |   |   |   |   |   |   |   |   |   | $ | 10,383 |   |

----

----

| ·   | Keystone      Steel and Wire (“KSW”), located in Peoria, Illinois, operates an electric      arc furnace mini-mill and manufactures and sells billets, wire rod,      industrial wire, coiled rebar and fabricated wire products to      agricultural, industrial, construction, commercial, original equipment      manufacturers and retail consumermarkets; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Engineered      Wire Products (“EWP”), located in Upper Sandusky, Ohio, manufactures and      sells wire mesh in both roll and sheet form that is utilized in concrete      construction products including pipe, pre-cast boxes and applications for      use in roadways, buildings and bridges;and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Keystone-Calumet      (“Calumet”), located in Chicago Heights, Illinois, manufactures and sells      merchant and special bar quality products and special sections in carbon      and alloy steel grades for use in agricultural, cold drawn, construction,      industrial chain, service centers, and transportation      applications.  We acquired Calumet on March 23,      2007. |
|--------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                |   | Three      months ended March 31, |    |
|---------------------------------------------------------------------|--------|----------------------------------------|---------|
|                                                                |   | 2007                                   |    |   | 2008 |   |
|                                                                |   | (In      thousands)                    |    |
|                                                                |   |                                   |    |   |   |   |
| Net      sales:                                                     |   |                                   |    |   |   |   |
|   KSW                                                     |   | $                                      | 110,766 |   |   | $ | 131,040 |   |
|   EWP                                                     |   |                                   | 10,977  |   |   |   | 13,052 |   |
|   Calumet                                                 |   |                                   | -       |   |   |   | 3,303 |   |
|   Elimination      of KSW’s intersegment sales |   |                                   | (8,645  | ) |   |   | (13,256 | ) |
|                                                                |   |                                   |    |   |   |   |   |   |
|      Total      net sales                  |   | $                                      | 113,098 |   |   | $ | 134,139 |   |
|                                                                |   |                                   |    |   |   |   |   |   |
| Operating      income (loss):                                       |   |                                   |    |   |   |   |   |   |
|   KSW                                                     |   | $                                      | 1,008   |   |   | $ | 2,410 |   |
|   EWP                                                     |   |                                   | 996     |   |   |   | 1,478 |   |
|   Calumet                                                 |   |                                   | (85     | ) |   |   | (692 | ) |
|   Pension      credit                                     |   |                                   | 20,378  |   |   |   | 18,996 |   |
|   OPEB      credit                                        |   |                                   | 2,200   |   |   |   | 2,198 |   |
|   Other(1)                                                |   |                                   | (206    | ) |   |   | (1,614 | ) |
|                                                                |   |                                   |    |   |   |   |   |   |
|      Total      operating income           |   |                                   | 24,291  |   |   |   | 22,776 |   |
|                                                                |   |                                   |    |   |   |   |   |   |
| Nonoperating      income (expense):                                 |   |                                   |    |   |   |   |   |   |
|   Interest      expense                                   |   |                                   | (1,197  | ) |   |   | (1,313 | ) |
|   Interest      and other income, net                     |   |                                   | 138     |   |   |   | 390 |   |
|                                                                |   |                                   |    |   |   |   |   |   |
|   Income      before income taxes                         |   | $                                      | 23,232  |   |   | $ | 21,853 |   |

----

|                                           |   | December      31,   |   |   | March      31, |   |
|------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                           |   | 2007                |   |   | 2008           |   |
|                                           |   | (In      thousands) |   |
|                                           |   |                |   |   |           |   |
|   Raw      materials                 |   | $                   | 6,954  |   |           | $      | 5,853 |   |
|   Billets                            |   |                | 8,158  |   |           |   | 5,162 |   |
|   Wire      rod                      |   |                | 12,897 |   |           |   | 13,735 |   |
|   Work      in process               |   |                | 5,079  |   |           |   | 6,084 |   |
|   Finished      products             |   |                | 24,855 |   |           |   | 23,880 |   |
|   Supplies                           |   |                | 19,900 |   |           |   | 20,527 |   |
|                                           |   |                |   |   |           |   |   |   |
|     Inventory      at FIFO |   |                | 77,843 |   |           |   | 75,241 |   |
|     Less      LIFO reserve |   |                | 24,292 |   |           |   | 25,220 |   |
|                                           |   |                |   |   |           |   |   |   |
|       Total      |   | $                   | 53,551 |   |           | $      | 50,021 |   |
|                                           |   |                |   |   |           |   |   |   |

|                                                 |   | December      31,   |   |   | March      31, |   |
|------------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                                 |   | 2007                |   |   | 2008           |   |
|                                                 |   | (In      thousands) |   |
|                                                 |   |                |   |   |           |   |
| Wachovia      revolving credit facility              |   | $                   | 46,261 |   |           | $      | 39,737 |   |
| 8%      Notes                                        |   |                | 17,160 |   |           |   | 9,240 |   |
| UC      Note                                         |   |                | 2,501  |   |           |   | 2,144 |   |
| Term      loans:                                     |
|   Wachovia                                 |   |                | 16,286 |   |           |   | 14,953 |   |
|   County                                   |   |                | 8,499  |   |           |   | 8,499 |   |
| Other                                                |   |                | 870    |   |           |   | 865 |   |
|                                                 |   |                |   |   |           |   |   |   |
|     Total      debt              |   |                | 91,577 |   |           |   | 75,438 |   |
|     Less      current maturities |   |                | 62,175 |   |           |   | 56,825 |   |
|                                                 |   |                |   |   |           |   |   |   |
|     Total      long-term debt    |   | $                   | 29,402 |   |           | $      | 18,613 |   |

----

|                              |   | Three      months ended March 31, 2008 |   |
|-----------------------------------|--------|---------------------------------------------|--------|
|                              |   | (In      thousands)                         |   |
|                              |   |                                        |   |
| Balance      at December 31, 2007 |   | $                                           | 5,282  |   |
| Payments                          |   |                                        | (191   | ) |
|                              |   |                                        |   |   |
| Balance      at March 31, 2008    |   | $                                           | 5,091  |   |

|                                      |   | March 31, 2008 |   |
|-------------------------------------------|--------|---------------------|--------|
|                                      |   | (In      thousands) |   |
|                                      |   |                |   |
| Other      accrued liabilities-current    |   | $                   | 214    |   |
| Other      accrued liabilities-noncurrent |   |                | 4,877  |   |
|                                      |   |                |   |   |
| Total                                     |   | $                   | 5,091  |   |

----

----

|                                           |   | December      31,   |   |   | March      31, |   |
|------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                           |   | 2007                |   |   | 2008           |   |
|                                           |   | (In      thousands) |   |
| Current:                                       |   |                |   |   |           |   |
|   Employee      benefits             |   | $                   | 10,881 |   |           | $      | 10,941 |   |
|   Self      insurance                |   |                | 3,755  |   |           |   | 4,654 |   |
|   Environmental                      |   |                | 217    |   |           |   | 214 |   |
|   Other                              |   |                | 4,744  |   |           |   | 4,421 |   |
|                                           |   |                |   |   |           |   |   |   |
| Total                                          |   | $                   | 19,597 |   |           | $      | 20,230 |   |
|                                           |   |                |   |   |           |   |   |   |
| Noncurrent:                                    |   |                |   |   |           |   |   |   |
|   Environmental                      |   | $                   | 5,065  |   |           | $      | 4,877 |   |
|   Workers      compensation payments |   |                | 1,494  |   |           |   | 1,440 |   |
|   Other                              |   |                | 141    |   |           |   | 141 |   |
|                                           |   |                |   |   |           |   |   |   |
| Total                                          |   | $                   | 6,700  |   |           | $      | 6,458 |   |

----

|                                                              |   | Three      months ended  March 31, |    |
|-------------------------------------------------------------------|--------|-----------------------------------------|---------|
|                                                              |   | 2007                                    |    |   | 2008 |   |
|                                                              |   | (In      thousands)                     |    |
|                                                              |   |                                    |    |   |   |   |   |   |
| Service      cost                                                 |   | $                                       | 969     |   |   | $ | 861 |   |
| Interest      cost                                                |   |                                    | 5,267   |   |   |   | 5,578 |   |
| Expected      return on plan assets                               |   |                                    | (23,012 | ) |   |   | (23,046 | ) |
| Amortization      of accumulated other comprehensive income: |   |                                    |    |   |   |   |   |   |
|   Prior      service cost                               |   |                                    | 306     |   |   |   | 307 |   |
|   Actuarial      gains                                  |   |                                    | (3,908  | ) |   |   | (2,696 | ) |
|                                                              |   |                                    |    |   |   |   |   |   |
| Total                                                             |   | $                                       | (20,378 | ) |   | $ | (18,996 | ) |

|                                                              |   | Three      months ended March 31, |   |
|-------------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                              |   | 2007                                   |   |   | 2008 |   |
|                                                              |   | (In      thousands)                    |   |
|                                                              |   |                                   |   |   |   |   |
| Service      cost                                                 |   | $                                      | 61     |   |   | $ | 52 |   |
| Interest      cost                                                |   |                                   | 480    |   |   |   | 533 |   |
| Amortization      of accumulated other comprehensive income: |   |                                   |   |   |   |   |   |   |
|   Prior      service credit                             |   |                                   | (4,411 | ) |   |   | (4,411 | ) |
|   Actuarial      losses                                 |   |                                   | 1,670  |   |   |   | 1,628 |   |
|                                                              |   |                                   |   |   |   |   |   |   |
| Total                                                             |   | $                                      | (2,200 | ) |   | $ | (2,198 | ) |

|                                           |   | Three      months ended |   |
|------------------------------------------------|--------|-------------------------|--------|
|                                           |   | March 31,               |   |
|                                           |   | 2007                    |   |   | 2008 |   |
|                                           |   | (In      thousands)     |   |
|                                           |   |                    |   |   |   |   |
| Expected      tax provision, at statutory rate |   | $                       | 8,130  |   |   | $ | 7,648 |   |
| U.S.      state income taxes, net              |   |                    | 623    |   |   |   | 585 |   |
| Other,      net                                |   |                    | 15     |   |   |   | 10 |   |
|                                           |   |                    |   |   |   |   |   |   |
| Provision      for income taxes                |   | $                       | 8,768  |   |   | $ | 8,243 |   |
|                                           |   |                    |   |   |   |   |   |   |

----

----

| ·   | Future      supply and demand for our products (including cyclicality      thereof), |
|--------------------|--------------------------------------------------------------------------------------|

| ·   | Customer      inventory levels, |
|--------------------|---------------------------------|

| ·   | Changes      in raw material and other operating costs (such as ferrous scrap and      energy) |
|--------------------|------------------------------------------------------------------------------------------------|

| ·   | The      possibility of labor disruptions, |
|--------------------|--------------------------------------------|

| ·   | General      global economic and politicalconditions, |
|--------------------|-------------------------------------------------------|

| ·   | Competitive      products (including low-priced imports) and substitute      products, |
|--------------------|----------------------------------------------------------------------------------------|

| ·   | Customer      and competitor strategies, |
|--------------------|------------------------------------------|

| ·   | The      impact of pricing and productiondecisions, |
|--------------------|-----------------------------------------------------|

| ·   | Environmental      matters (such as those requiring emission and discharge standards for      existing and new facilities), |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------|

| ·   | Government      regulations and possible changestherein, |
|--------------------|----------------------------------------------------------|

| ·   | Significant      increases in the cost of providing medical coverage to      employees, |
|--------------------|-----------------------------------------------------------------------------------------|

| ·   | The      ultimate resolution of pendinglitigation, |
|--------------------|----------------------------------------------------|

| ·   | International      trade policies of the United States and certain foreign      countries, |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | Operating      interruptions (including, but not limited to, labor disputes, fires,      explosions, unscheduled or unplanned downtime and transportation      interruptions), |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Our      ability to renew or refinance creditfacilities, |
|--------------------|----------------------------------------------------------|

| ·   | Any      possible future litigation, and |
|--------------------|------------------------------------------|

| ·   | Other      risks and uncertainties as discussed in this Quarterly Report and the 2007      Annual Report, including, without limitation, the section referenced      above. |
|--------------------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                                            |   | Three      months ended  March 31, |    |
|-------------------------------------------------|--------|----------------------------------------------|---------|
|                                            |   | 2007                                         |    |   | 2008 |   |
|                                            |   | (In      thousands)                          |    |
| Operating      income as reported               |   | $                                            | 24,291  |   |   | $ | 22,776 |   |
|   Defined      benefit pension credit |   |                                         | (20,378 | ) |   |   | (18,996 | ) |
|   OPEB      credit                    |   |                                         | (2,200  | ) |   |   | (2,198 | ) |
| Operating      income before pension and OPEB   |   | $                                            | 1,713   |   |   | $ | 1,582 |   |

| ·   | lower      shipment volumes of fabricated wire products as a result of customer      resistance to our price increases; |
|--------------------|-------------------------------------------------------------------------------------------------------------------------|

| ·   | lower      shipment volumes of industrial wire due to exceptional shipment volumes      during the first quarter of 2007 as a result of competitor production      problems; |
|--------------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | increased      costs for ferrous scrap; |
|--------------------|-----------------------------------------|

| ·   | increased      costs for electricity and naturalgas; |
|--------------------|------------------------------------------------------|

| ·   | severance      costs of $800,000 related to the reduction in force at our largest      manufacturing facility during the first quarter of  2008; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of wire rod due to lower quantities of import product      available for sale and higher prices for import products as well as the      weak U.S. dollar; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      per-ton product selling prices primarily in reaction to the increased      costs for ferrous scrap. |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

----

|                                      |   | Three      months ended March 31, |   |
|-------------------------------------------|--------|----------------------------------------|--------|
|                                      |   | 2007                                   |   |   | 2008 |   |
| Sales      volume (000 tons):             |   |                                   |   |   |   |   |
|   Fabricated      wire products |   |                                   | 34     |   |   |   | 30 |   |
|   Wire      mesh                |   |                                   | 12     |   |   |   | 13 |   |
|   Industrial      wire          |   |                                   | 23     |   |   |   | 17 |   |
|   Coiled      Rebar             |   |                                   | 6      |   |   |   | 3 |   |
|   Bar                           |   |                                   | -      |   |   |   | 5 |   |
|   Wire      rod                 |   |                                   | 86     |   |   |   | 106 |   |
|   Billets                       |   |                                   |   | (1) |   |   | 1 |   |
|     Total             |   |                                   | 161    |   |   |   | 175 |   |
|                                      |   |                                   |   |   |   |   |   |   |
| (1)      Less than 1,000 tons.            |   |                                   |   |   |   |   |   |   |
|                                      |   |                                   |   |   |   |   |   |   |
| Average      per-ton selling prices:      |   |                                   |   |   |   |   |   |   |
|   Fabricated      wire products |   | $                                      | 1,068  |   |   | $ | 1,180 |   |
|   Wire      mesh                |   |                                   | 879    |   |   |   | 941 |   |
|   Industrial      wire          |   |                                   | 733    |   |   |   | 846 |   |
|   Coiled      Rebar             |   |                                   | 526    |   |   |   | 624 |   |
|   Bar                           |   |                                   | -      |   |   |   | 710 |   |
|   Wire      rod                 |   |                                   | 517    |   |   |   | 621 |   |
|   Billets                       |   |                                   | 132    |   |   |   | 255 |   |
|   All      products             |   |                                   | 693    |   |   |   | 764 |   |

| ·   | higher      shipment volumes of fabricated wire products as we believe 2007      agricultural and construction projects which were cancelled due to      inclement weather in 2007 will be completed during  2008; |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of bar products as we continue to gain customer      confidence in the bar market; |
|--------------------|-----------------------------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of coiled rebar as we continue to penetrate that      market; |
|--------------------|--------------------------------------------------------------------------------------------|

| ·   | higher      shipment volumes of wire mesh due to the additional products manufactured      at EWP as a result of a 2007 plant expansion partially offset by continued      weakness in the constructionmarket; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | level      shipment volumes of industrial wire as price increases are expected to      result in lower demand; |
|--------------------|----------------------------------------------------------------------------------------------------------------|

| ·   | slightly      lower shipment volumes of wire rod as we use more steel internally in the      production of value-added products (KSW expects to ship more billets to      Calumet as a result of Calumet gaining recurring monthly orders for bar      products and KSW expects to ship more wire rod to EWP as a result of EWP’s      2007 plant expansion); partially offset by an increase in wire rod demand      during the first quarter of 2008 due to higher Chinese export tariffs and      a weak U.S. dollar (we expect wire rod import competition to rebound      during 2008); and |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | higher      overall per-ton selling prices that more than offset the impact of higher      cost for ferrous scrap. |
|--------------------|--------------------------------------------------------------------------------------------------------------------|

----

| ·   | lower      defined benefit pension credit as we expect the 2008 credit to approximate      $76.0 million as compared to the $80.4 million credit recorded in 2007;      and         |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·   | lower      interest expense in 2008 due to the paydown of our revolving credit      facility during the first quarter of 2008 as a result of the subscription      rights offering. |

| ·   | Keystone      Steel and Wire (“KSW”), located in Peoria, Illinois, operates an electric      arc furnace mini-mill and manufactures and sells billets, wire rod,      industrial wire, coiled rebar and fabricated wire products to      agricultural, industrial, construction, commercial, original equipment      manufacturers and retail consumermarkets; |
|--------------------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Engineered      Wire Products (“EWP”), located in Upper Sandusky, Ohio, manufactures and      sells wire mesh in both roll and sheet form that is utilized in concrete      construction products including pipe, pre-cast boxes and applications for      use in roadways, buildings and bridges;and |
|--------------------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| ·   | Keystone-Calumet,      Inc. (“Calumet”), located in Chicago Heights, Illinois, manufactures and      sells merchant and special bar quality products and special sections in      carbon and alloy steel grades for use in agricultural, cold drawn,      construction, industrial chain, service centers, and transportation      applications. |
|--------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                             |   | KSW                 |     |   | EWP    |   |    | Calumet |   |   | Other(1) |   |   | Total  |    |
|------------------------------------------------------------------|--------|---------------------|----------|--------|--------|--------|---------|---------|--------|--------|----------|--------|--------|--------|---------|
|                                                             |   | (In      thousands) |     |
| Three      months ended March 31, 2007:                          |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |
|  Net      sales                                             |   | $                   | 110,766  |   |   | $      | 10,977  |    |   | $      | -        |   |   | $      | (8,645  | ) |   | $ | 113,098 |   |
|  Cost      of goods sold                                    |   |                | (106,119 | )      |   |   | (9,128  | )       |   |   | (76      | )      |   |   | 8,592   |   |   |   | (106,731 | ) |
|    Gross      margin (loss)                       |   |                | 4,647    |   |   |   | 1,849   |    |   |   | (76      | )      |   |   | (53     | ) |   |   | 6,367 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
|  Selling      and administrative expense               |   |                | (3,639   | )      |   |   | (853    | )       |   |   | (9       | )      |   |   | (153    | ) |   |   | (4,654 | ) |
|  Operating      income (loss) before      pension/OPEB |   | $                   | 1,008    |   |   | $      | 996     |    |   | $      | (85      | )      |   | $      | (206    | ) |   | $ | 1,713 |   |
|                                                             |
| Three      months ended March 31, 2008:                          |   |
|                                                             |   |
|  Net      sales                                             |   | $                   | 131,040  |   |   | $      | 13,052  |    |   | $      | 3,303    |   |   | $      | (13,256 | ) |   | $ | 134,139 |   |
|  Cost      of goods sold                                    |   |                | (124,992 | )      |   |   | (10,764 | )       |   |   | (3,832   | )      |   |   | 12,575  |   |   |   | (127,013 | ) |
|    Gross      margin (loss)                       |   |                | 6,048    |   |   |   | 2,288   |    |   |   | (529     | )      |   |   | (681    | ) |   |   | 7,126 |   |
|                                                             |   |                |     |   |   |   |    |    |   |   |     |   |   |   |    |   |   |   |   |   |
|  Selling      and administrative      expense          |   |                | (3,638   | )      |   |   | (810    | )       |   |   | (163     | )      |   |   | (933    | ) |   |   | (5,544 | ) |
|  Operating      income (loss) before      pension/OPEB |   | $                   | 2,410    |   |   | $      | 1,478   |    |   | $      | (692     | )      |   | $      | (1,614  | ) |   | $ | 1,582 |   |

----

|                                                     |   |  Three months ended March      31, |     |
|----------------------------------------------------------|--------|-----------------------------------------|----------|
|                                                     |   | 2007                                    |     |   | %      ofsales |   |   | 2008 |   |   | %      ofSales |   |
|                                                     |   | ($      in thousands)                   |     |
|                                                     |   |                                    |     |   |   |   |   |   |   |   |   |   |
| Net      sales                                           |   | $                                       | 110,766  |   |   |   | 100.0 | % |   | $ | 131,040 |   |   |   | 100.0 | % |
| Cost      of goods sold                                  |   |                                    | (106,119 | ) |   |   | (95.8 | ) |   |   | (124,992 | ) |   |   | (95.4 | ) |
|    Gross      margin                      |   |                                    | 4,647    |   |   |   | 4.2 |   |   |   | 6,048 |   |   |   | 4.6 |   |
|                                                     |   |                                    |     |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense                  |   |                                    | (3,639   | ) |   |   | (3.3 | ) |   |   | (3,638 | ) |   |   | (2.8 | ) |
| Operating      income before pension and  OPEB |   | $                                       | 1,008    |   |   |   | 0.9 | % |   | $ | 2,410 |   |   |   | 1.8 | % |

|                                                         |   | Three      months ended March      31, |      |
|--------------------------------------------------------------|--------|---------------------------------------------|-----------|
|                                                         |   | 2007                                        |      |   | 2008 |   |
| Sales      volume (000 tons):                                |   |                                        |      |   |   |   |
|   Fabricated      wire products                    |   |                                        | 34        |   |   |   | 30 |   |
|   Industrial      wire                             |   |                                        | 23        |   |   |   | 17 |   |
|   Coiled      rebar                                |   |                                        | 6         |   |   |   | 3 |   |
|   Wire      rod                                    |   |                                        | 101       |   |   |   | 124 |   |
|   Billets                                          |   |                                        | (1)  |   |   |   | 6 |   |
|   Total      sales                                 |   |                                        | 164       |   |   |   | 180 |   |
|                                                         |   |                                        |      |   |   |   |   |   |
| (1)Less than 1,000      tons                                 |   |                                        |      |   |   |   |   |   |
|                                                         |   |                                        |      |   |   |   |   |   |
| Per-ton      selling prices:                                 |   |                                        |      |   |   |   |   |   |
|   Fabricated      wire products                    |   | $                                           | 1,068     |   |   | $ | 1,180 |   |
|   Industrial      wire                             |   |                                        | 733       |   |   |   | 846 |   |
|   Coiled      rebar                                |   |                                        | 526       |   |   |   | 624 |   |
|   Wire      rod                                    |   |                                        | 526       |   |   |   | 619 |   |
|   Billets                                          |   |                                        | 132       |   |   |   | 461 |   |
|   All      products                                |   |                                        | 669       |   |   |   | 727 |   |
|                                                         |   |                                        |      |   |   |   |   |   |
| Average      per-ton ferrous scrap      purchase cost   |   | $                                           | 224       |   |   | $ | 296 |   |
|                                                         |   |                                        |      |   |   |   |   |   |
| Average      electricity cost      per kilowatt hour(2) |   | $                                           | 0.05      |   |   | $ | 0.06 |   |
|                                                         |   |                                        |      |   |   |   |   |   |
| Average      natural gas cost      per therm(2)         |   | $                                           | 0.78      |   |   | $ | 0.86 |   |

----

|                                          |   | Three months ended March31, |   |
|-----------------------------------------------|--------|-----------------------------|--------|
|                                          |   | 2007                        |   |   | %      of sales |   |   | 2008 |   |   | %      ofsales |   |
|                                          |   | ($      in thousands)       |   |
|                                          |   |                        |   |   |   |   |   |   |   |   |   |   |
| Net      sales                                |   | $                           | 10,977 |   |   |   | 100.0 | % |   | $ | 13,052 |   |   |   | 100.0 | % |
| Cost      of goods sold                       |   |                        | (9,128 | ) |   |   | (83.2 | ) |   |   | (10,764 | ) |   |   | (82.5 | )% |
|         Gross margin                |   |                        | 1,849  |   |   |   | 16.8 |   |   |   | 2,288 |   |   |   | 17.5 |   |
|                                          |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Selling      and administrative expense       |   |                        | (853   | ) |   |   | (7.8 | ) |   |   | (810 | ) |   |   | (6.2 | ) |
| Operating      income before pension and OPEB |   | $                           | 996    |   |   |   | 9.0 | % |   | $ | 1,478 |   |   |   | 11.3 | % |

|                                                           |   | Three      months ended March 31, |   |
|----------------------------------------------------------------|--------|----------------------------------------|--------|
|                                                           |   | 2007                                   |   |   | 2008 |   |
|                                                           |   |                                   |   |   |   |   |
| Sales      volume (000 tons) –  Wire      mesh |   |                                   | 12     |   |   |   | 13 |   |
|                                                           |   |                                   |   |   |   |   |   |   |
| Per-ton      selling prices –  Wire      mesh  |   | $                                      | 879    |   |   | $ | 941 |   |
|                                                           |   |                                   |   |   |   |   |   |   |
| Average      per-ton wire rod purchase      cost          |   | $                                      | 515    |   |   | $ | 606 |   |

----

|                                                     |   | December      31,   |   |   | March      31, |   |
|----------------------------------------------------------|--------|---------------------|--------|--------|----------------|--------|
|                                                     |   | 2007                |   |   | 2008           |   |
|                                                     |   | (In      thousands) |   |
|                                                     |   |                |   |   |           |   |
| Working      capital                                     |   | $                   | 20,630 |   |           | $      | 36,488 |   |
| Outstanding      balance under revolving credit facility |   |                | 46,261 |   |           |   | 39,737 |   |
|                                                     |   |                |   |   |           |   |   |   |
| Borrowing      availability                              |   |                | 22,836 |   |           |   | 37,570 |   |

----

| ·         | lower      net cash used due to relative changes in our accounts receivable in 2008      of $17.8 million primarily due to an abnormally high accounts receivable      balance at December 31, 2007 as a result of exceptional demand during the      fourth quarter of 2007 (the seasonality of our business generally results      in lower accounts receivable at the end of each year);  and |
|--------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ·    | net      cash used by relative changes in our accounts payable during the first      quarter of 2008 as compared to net cash provided by relative changes in      our accounts payable during the first quarter of 2007 due to timing of      payments to our primary ferrous scrapvendor.                                                                                                       |

----

----

----

|   | · | pertain      to the maintenance of records that in reasonable detail accurately and      fairly reflect our transactions and dispositions of our      assets, |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide      reasonable assurance that transactions are recorded as necessary to permit      preparation of financial statements in accordance with GAAP, and that our      receipts and expenditures are made only in accordance with authorizations      of our management and directors,and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | provide      reasonable assurance regarding prevention or timely detection of      unauthorized acquisition, use or disposition of our assets that could have      a material effect on our Condensed Consolidated Financial      Statements. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

| (a) | We      have retained a signed original of any exhibit listed below that contains      signatures, and we will provide any such exhibit to the Commission or its      staff upon request.  The following exhibit is included      herein: |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 31.1 | Certification. |
|--------|------|----------------|

|   | 31.2 | Certification. |
|--------|------|----------------|

|   | 32.1 | Certification. |
|--------|------|----------------|

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| Date:  May      9, 2008  | By/s/ Bert E. Downing,      Jr.                                                                Bert      E. Downing, Jr.Vice      President, Chief Financial Officer,Corporate      Controller and Treasurer |
|-----------------------------------------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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