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 March 31, 1999


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 of                   (I.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 May 13, 1999:  9,926,531

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                                     INDEX


                                                                 Page 
                                                                Number


PART I.     FINANCIAL INFORMATION

  Item 1.  Financial Statements

         Consolidated Balance Sheets - December 31, 1998
           and March 31, 1999                                      3-4
         Consolidated Statements of Operations - Three months
           ended March 31, 1998 and 1999                             5
         Consolidated Statements of Cash Flows - Three months
           ended March 31, 1998 and 1999                             6

         Consolidated Statement of Stockholders' Equity -
           Three months ended March 31, 1999                         7
         Notes to Consolidated Financial Statements               8-13

  Item 2.  Management's Discussion and Analysis of Financial
           Condition and Results of Operations                   14-20


PART II.    OTHER INFORMATION

  Item 1.  Legal Proceedings                                        21

  Item 6.  Exhibits and Reports on Form 8-K                         21

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                          CONSOLIDATED BALANCE SHEETS

                                 (In thousands)
<TABLE>
<CAPTION>
                                                      December 31,  March 31,
                       ASSETS                             1998         1999  

<S>                                                  <C>           <C>
Current assets:
  Notes and accounts receivable                     $  36,786      $ 48,701
  Inventories                                          52,239        50,054
  Deferred income taxes                                18,985        17,948
  Prepaid expenses and other                            3,916         5,944


     Total current assets                             111,926       122,647


Property, plant and equipment                         354,682       350,826
Less accumulated depreciation                         198,582       194,815


     Net property, plant and equipment                156,100       156,011


Other assets:
  Restricted investments                                8,624         8,746
  Prepaid pension cost                                120,516       123,016
  Deferred financing costs                              3,493         3,378
  Goodwill                                              1,115         1,087
  Other                                                 4,083         4,264


     Total other assets                               137,831       140,491


                                                     $405,857      $419,149

</TABLE>

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                    CONSOLIDATED BALANCE SHEETS (CONTINUED)

                                 (In thousands)
<TABLE>
<CAPTION>
       LIABILITIES AND STOCKHOLDERS' EQUITY
                                                    December 31,   March 31,
                                                         1998         1999   

<S>                                                   <C>           <C>     
Current liabilities:
  Notes payable and current maturities of
    long-term debt                                  $ 29,912      $ 50,989
  Accounts payable                                    34,002        28,885
  Accrued OPEB cost                                   10,000        10,000
  Other accrued liabilities                           37,457        34,844


      Total current liabilities                      111,371       124,718


Noncurrent liabilities:
  Long-term debt                                     101,852       101,394
  Accrued OPEB cost                                   99,047        98,705
  Deferred income taxes                                6,162         7,375
  Negative goodwill                                   24,065        23,726
  Other                                               10,283         9,780


      Total noncurrent liabilities                   241,409       240,980


Stockholders' equity:
  Common stock                                        10,569        10,656
  Additional paid-in capital                          51,763        52,398
  Accumulated deficit                                 (9,243)       (9,591)
  Treasury stock, at cost                                (12)          (12)


      Total stockholders' equity                      53,077        53,451

                                                    $405,857      $419,149

</TABLE>


                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF OPERATIONS

                     (In thousands, except per share data)
<TABLE>
<CAPTION>
                                                           Three months ended
                                                                March 31,    

                                                             1998       1999

<S>                                                        <C>        <C>    
Revenues and other income:
  Net sales                                                $96,104    $91,717
  Interest                                                     226         82
  Other, net                                                   113        121

                                                            96,443     91,920

Costs and expenses:
  Cost of goods sold                                        88,173     83,663
  Selling                                                    1,519      1,803
  General and administrative                                 3,466      6,081
  Overfunded defined benefit pension credit                 (2,308)    (2,500)
  Interest                                                   2,593      3,516

                                                            93,443     92,563


    Income (loss) before income taxes                        3,000       (643)

Provision (benefit) for income taxes                           798       (295)


    Net income (loss)                                        2,202       (348)

Dividends on preferred stock                                    70       -   
  Net income (loss) available for common shares            $ 2,132    $  (348)

                                                                             

Net income (loss) per share available for common shares:
  Basic                                                    $   .23   $  (.04)

                                                                            
  Diluted                                                  $   .22   $  (.04)

                                                                            



Weighted average common and common equivalent
 shares outstanding:

  Basic                                                      9,318      9,838

                                                                             
  Diluted                                                    9,526      9,838

</TABLE>



                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                     CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (In thousands)
<TABLE>
<CAPTION>
                                                         Three months ended
                                                             March 31,     

                                                          1998       1999

 <S>                                                    <C>        <C>    
Cash flows from operating activities:
  Net income (loss)                                     $  2,202  $   (348)
  Depreciation and amortization                            4,739     5,853
  Amortization of deferred financing costs                   126       130
  Deferred income taxes                                      720     2,249
  Other, net                                                  22      (443)
  Change in assets and liabilities:
    Accounts receivable                                  (15,611)  (12,436)
    Inventories                                           (1,660)    1,345
    Prepaid pension cost                                  (2,308)   (2,500)
    Accounts payable                                       5,379    (3,797)
    Other, net                                            (4,529)   (3,984)


      Net cash used by operating activities              (10,920)  (13,931)


Cash flows from investing activities:
  Capital expenditures                                   (16,185)   (6,537)
  Other, net                                                (773)     (151)


      Net cash used by investing activities              (16,958)   (6,688)


Cash flows from financing activities:
  Revolving credit facilities, net                         5,728    21,074
  Other notes payable and long-term debt:
    Additions                                               -          103
    Principal payments                                      (484)     (558)
  Common stock issued                                         82      -
  Preferred stock dividend payments                          (70)     -   

      Net cash provided by financing activities            5,256    20,619


Net change in cash and cash equivalents                  (22,622)     -

Cash and cash equivalents, beginning of period            22,622      -   


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

                                                                          

Supplemental disclosures:
  Cash paid for:
    Interest, net of amount capitalized                 $  4,858  $  5,840
    Income taxes                                              77       673
  Common stock contributed to employee benefit plan     $    616  $    722
</TABLE>

                     KEYSTONE CONSOLIDATED INDUSTRIES, INC.
                                AND SUBSIDIARIES

                 CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY

                       Three months ended March 31, 1999
                                 (In thousands)
<TABLE>
<CAPTION>
                                      Additional
                              Common    paid-in   Accumulated  Treasury
                               Stock    capital     deficit      stock     Total

<S>                         <C>       <C>    
Balance - December 31, 1998 $10,569    $51,763    $(9,243)     $(12)     $53,077

Net loss                       -          -          (348)       -          (348)

Issuance of common stock         87        635       -           -           722


Balance - March 31, 1999    $10,656    $52,398    $(9,591)     $(12)     $53,451

</TABLE>

                     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, 1998 has been condensed from
the Company's audited consolidated financial statements at that date.  The
consolidated balance sheet at March 31, 1999 and the consolidated statements of
operations and cash flows for the interim periods ended March 31, 1998 and 1999,
and the consolidated statement of stockholders' equity for the interim period
ended March 31, 1999, 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, 1998 (the "Annual
Report").

     Contran Corporation ("Contran") and other entities controlled by 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.

Note 2 - Joint ventures:

     In January 1999, Keystone and two unrelated parties formed Garden Zone LLC
("Garden Zone"), a joint venture to supply wire, wood and plastic products to
the consumer lawn and garden markets.  Keystone owns 51% of the joint venture
and, as such, Keystone's consolidated financial statements at March 31, 1999
include the accounts of Garden Zone.  Neither Keystone, or the other owners,
contributed any capital or other assets to the Garden Zone joint venture, but
Keystone did guarantee Garden Zone's new $4 million revolving credit agreement.
See Note 5.  Garden Zone commenced operations in February 1999 and through March
31, 1999 incurred a pre-tax loss of $172,000, all of which accrued to Keystone
for financial reporting purposes.

     In May 1999, Keystone announced it had agreed to enter into a joint venture
with Alter Peoria, Inc. ("Alter"), an unrelated entity, to operate a scrap
recycling operation at Keystone's facility in Peoria, Illinois.  The joint
venture will be known as Alter Recycling Company, L.L.C. and Keystone's 50%
interest will be owned through one of Keystone's wholly-owned subsidiaries.
Keystone will contribute the property and equipment of its current Peoria scrap
facility to the joint venture and Alter will contribute an equal amount of cash
of approximately $400,000.  Keystone does not currently anticipate it will be
required to make any other contributions to fund or operate this joint venture.

Note 3 - Disposition:

     In January 1999, Keystone's wholly-owned subsidiary, DeSoto, Inc. sold its
household cleaning products division.  DeSoto did not record any gain or loss as
a result of this sale.
Note 4 - Inventories:

     Inventories are stated at the lower of cost or market.  At December 31,
1998 and March 31, 1999, the last-in, first-out ("LIFO") method was used to
determine the cost of approximately three-fourths of total inventories and the
first-in, first-out or average cost methods was used to determine the cost of
other inventories.
<TABLE>
<CAPTION>
                                                      December 31,  March 31,
                                                          1998        1999   

                                                          (In thousands)
<S>                                                     <C>        <C>
Raw materials:
  Steel and wire products                               $17,400     $14,520
  Household cleaning products                               650        -   

                                                         18,050      14,520


Work in process -
  Steel and wire products                                 8,642       7,477


Finished products:
  Steel and wire products                                12,797      18,161
  Household cleaning products                               249        -   

                                                         13,046      18,161

Supplies:

  Steel and wire products                                16,894      14,230

                                                         56,632      54,388


Less LIFO reserve:

  Steel and wire products                                 4,334       4,334
  Household cleaning products                                59        -   

                                                          4,393       4,334
                                                        $52,239     $50,054

</TABLE>

Note 5 - Notes payable and long-term debt:
<TABLE>
<CAPTION>
                                                      December 31,  March 31,
                                                          1998         1999  

                                                          (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                                           24,580        42,601
    EWP                                                 4,000         4,766
    Garden Zone                                          -            2,287
  Term loan - EWP                                       1,020           875
Other                                                   2,164         1,854

                                                      131,764       152,383
  Less current maturities                              29,912        50,989


                                                     $101,852      $101,394

</TABLE>


Note 6 - Income taxes:

     Summarized below are (i) the differences between the provision (benefit)
for income taxes and the amounts that would be expected using the U.S. federal
statutory income tax rate of 35%, and (ii) the components of the comprehensive
provision (benefit) for income taxes.
<TABLE>
<CAPTION>
                                                        Three months ended
                                                             March 31,    

                                                          1998         1999

                                                           (In thousands)
<S>                                                    <C>          <C>
Expected tax expense (benefit), at statutory rate       $1,050      $  (225)
U. S. state income taxes, net                               66           19
Amortization of goodwill                                  (109)        (109)
Other, net                                                (209)          20



Comprehensive provision (benefit) for income taxes      $  798      $  (295)

                                                                           

Comprehensive provision (benefit) for income taxes:
  Currently payable (refundable):
    U.S. federal                                        $  401      $(2,307)
    U.S. state                                               7         (237)
    Benefit of loss carryforwards                         (201)        -
    Utilization of alternative minimum tax credits        (129)        -   

      Net currently payable (refundable)                    78       (2,544)

  Deferred income taxes, net                               720        2,249


                                                        $  798      $  (295)

</TABLE>




Note 7 - Other accrued liabilities:
<TABLE>
<CAPTION>
                                                      December 31,  March 31,
                                                          1998         1999  

                                                          (In thousands)
<S>                                                    <C>          <C>
Current:
  Salary, wages, vacations and other
    employee expenses                                  $11,560      $10,011
  Environmental                                          7,165        7,915
  Self insurance                                         6,950        7,170
  Interest                                               4,054        1,608
  Disposition of former facilities                       1,452        1,320
  Legal and professional                                   795          771
  Other                                                  5,481        6,049


                                                       $37,457      $34,844

                                                                           

Noncurrent:
  Environmental                                        $ 8,175      $ 8,175
  Deferred gain                                            821          347
  Other                                                  1,287        1,258


                                                       $10,283      $ 9,780

</TABLE>

Note 8 - Operations:

     During 1998, the Company's operations were 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 manufacture and sale of
household cleaning products.  Beginning in 1999, Keystone is also engaged in the
distribution of wire, plastic and wood lawn and garden products to retailers
through Garden Zone.  Garden Zone's identifiable segment assets at March 31,
1999 were approximately $3.7 million.  In January 1999, Keystone sold its
household cleaning products division.  See Note 3.  At December 31, 1998,
identifiable segment assets related to the household cleaning products division
amounted to approximately $2.3 million.
<TABLE>
<CAPTION>
                                                          Three months ended
                                                           1998        1999

                                                            (In thousands)
<S>                                                      <C>         <C>
Revenues:
  Steel and wire products                                 $92,980    $89,848
  Lawn and garden products                                   -         3,029
  Household cleaning products                               3,124       -   

                                                           96,104     92,877
  Elimination of intersegment revenues                       -        (1,160)


                                                          $96,104    $91,717

                                                                            

Income (loss) before income taxes:
  Operating profit (loss):
    Steel and wire products                                $4,579    $ 2,194
    Lawn and garden products                                 -          (156)
    Household cleaning products                                 3       -   


                                                            4,582      2,038
  General corporate items:
    Interest income                                           226         82
    General income (expense), net                             785        753
  Interest expense                                         (2,593)    (3,516)


                                                          $ 3,000    $  (643)

</TABLE>

Note 9 - Contingencies:

     At March 31, 1999, the Company's financial statements reflected accrued
liabilities of $16.1 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.

     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.


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


RESULTS OF OPERATIONS:

     Keystone 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.
     Beginning in 1999, Keystone is also engaged in the distribution of wire,
plastic and wood lawn and garden products to retailers through its 51%-owned
subsidiary Garden Zone LLC ("Garden Zone").  Garden Zone was formed as a joint
venture between Keystone and two unrelated parties in January 1999.  See Note 2
to the Consolidated Financial Statements.

     Prior to January 1999, Keystone was also engaged in the manufacture and
distribution of household cleaning products through its wholly-owned subsidiary
DeSoto, Inc. ("DeSoto").  In January 1999, DeSoto sold its household cleaning
products division.  See Note 3 to the Consolidated Financial Statements.

     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 Item 2 - Management's Discussion And Analysis Of Financial Condition And
Results Of Operations", are forward looking statements based on management's
belief and assumptions using currently available information.  Although the
Company believes the expectations reflected in such forward-looking statements
are reasonable, it can give no assurance that these expectations will prove to
be correct.  Such statements involve risks and uncertainties, including, but not
limited to, cost of raw materials, future supply and demand for the Company's
products (including cyclicality thereof), general economic conditions,
competitive products and substitute products, customer and competitor
strategies, the impact of pricing and production decisions, environmental
matters, government regulations and possible changes therein, the ultimate
resolution of pending litigation, successful implementation of the Company's
capital improvements plan, possible disruptions of normal business activity from
Year 2000 issues 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 should the underlying assumptions prove
incorrect, actual results could differ materially from those forecasted or
expected.  The Company assumes no duty to publicly update such statements.


     The following table sets forth the Company's production and sales volume
data for the periods indicated:
<TABLE>
<CAPTION>
                                                 Three months ended March 31,

                                                     1998            1999

                                                    (In thousands of tons)
<S>                                                  <C>            <C>
Production volume:
 Billets:
  Produced                                          171            155
  Purchased                                          -              28
 Rod                                                172            172

Sales volume:
 Fabricated wire products                            76             85
 Industrial wire                                     42             38
 Steel rod                                           64             54
                                                
                                                    182            277
</TABLE>



     The following table sets forth the components of the Company's net sales
for the periods indicated.
<TABLE>
<CAPTION>
                                                 Three months ended March 31,

                                                         (In millions)
                                                     1998            1999

<S>                                                   <C>            <C>
Fabricated wire products                            $52.5          $58.7
Industrial wire                                      20.5           17.6
Rod                                                  19.7           13.2
Lawn and garden products                              -              1.9
Household cleaning products                           3.1            -  
Other                                                  .3             .3

                                                    $96.1          $91.7

</TABLE>


     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 March 31,

                                                     1998            1999

<S>                                                   <C>            <C>
Net sales                                           100.0%         100.0%
Cost of goods sold                                   91.7           91.2

Gross profit                                          8.3            8.8
Selling expense                                       1.6            2.0
General and administrative expense                    3.6            6.6
Overfunded defined benefit pension credit            (2.4)          (2.7)

Income (loss) before income taxes                     3.1%           (.7)%
Provision (benefit) for income taxes                   .8            (.3)


Net income (loss)                                     2.3%           (.4)%

</TABLE>


    Billet production during the 1999 first quarter (155,000 tons) declined
from the 1998 first quarter (171,000) tons primarily due to start-up production
problems related to the Company's new electric arc furnace installed in the 1998
fourth quarter.  Although billet production during the 1999 first quarter
declined from the 1998 first quarter, rod production in the 1999 period (172,000
tons) was comparable with the 1998 period due to Keystone purchasing 28,000 tons
of billets in the 1999 period.  During the 1998 period, the Company did not
purchase any billets.

     Net sales of $91.7 million in the 1999 first quarter were down 5 percent
from $96.1 million in the same period in 1998.  The decline in sales was due to
a 1% overall decrease in product per ton selling prices, coupled with a 3%
decrease in sales volume.  Although rod production was constant between the 1999
and 1998 periods, shipments of rod declined 15% while per ton selling prices of
rod declined 21%.  Industrial wire shipments during 1999 declined 9% from the
1998 quarter while per ton selling prices declined 6%.  Fabricated wire product
shipments increased 11% during the 1999 first quarter as compared to the 1998
first quarter while per ton selling prices increased 1%.

     Gross profit during the 1999 first quarter increased slightly to $8.1
million from $7.9 million in the 1998 first quarter as the Company's gross
margin increased from 8.3% in the 1998 period to 8.8% in the 1999 first quarter.
This increase in gross margin was due to lower costs for scrap steel, Keystone's
primary raw material, partially offset by higher production costs associated
with weather related issues and the start-up of new equipment installed at the
Company's steel mini-mill in Peoria, Illinois and purchased billet costs.  The
Company believes it has identified the start-up problems and expects to have
these problems resolved by the start of the 1999 third quarter.  During the 1999
first quarter, the Company purchased 111,000 tons of scrap at an average price
of $80 per ton as compared to 1998 first quarter purchases of 175,000 tons at an
average price of $125 per ton.  During the 1999 first quarter, Keystone
purchased 28,000 tons of billets at an average price of $199 per ton, as
compared to none in the 1998 first quarter.

     Selling expenses increased 19% to $1.8 million in the first quarter of 1999
from $1.5 million in the 1998 first quarter but remained relatively constant as
a percentage of net sales.

     General and administrative expenses during the 1999 first quarter increased
$2.6 million to $6.1 million from $3.5 million in the 1998 first quarter due
primarily to higher general insurance and environmental charges, an unfavorable
legal settlement of $460,000 in the 1999 first quarter and administrative
expenses associated with the start-up of Garden Zone during the 1999 first
quarter.  In addition, the 1998 first quarter included legal fee reimbursements
of $380,000.

     Interest expense in the first quarter of 1999 was higher than the first
quarter of 1998 due principally to higher average borrowing levels under the
Company's revolving credit facilities.  Average borrowings by the Company under
its revolving credit facilities, term loans and 9 5/8% Senior Secured Notes
approximated $142.1 million in the first quarter of 1999 as compared to $106.2
million in the first quarter of 1998.  During the first quarter of 1999, the
average interest rate paid by the Company was 9.3% per annum as compared to 9.6%
per annum in the first quarter of 1998.

     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 5 to the Consolidated Financial Statements.

     As a result of the items discussed above, the Company incurred a net loss
during the first quarter of 1999 of $348,000 as compared to net income of $2.2
million in the first quarter of 1998.

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 March 31, 1999 the Company had negative working capital of $2.1 million,
including $2.1 million of notes payable and current maturities of long-term debt
as well as outstanding borrowings under the Company's revolving credit
facilities of $48.9 million.  The amount of available borrowings under these
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 in excess of $25 million under its $55 million
revolving credit facility is dependent upon maintenance of a consolidated cash
flow ratio (as defined) for the most recently completed four fiscal quarters of
at least 2.5 to 1. At March 31, 1999, unused credit available for borrowing
under Keystone's $55 million revolving credit facility, which expires December
31, 1999, EWP's $6 million revolving credit facility, which expires June 30,
2000, and Garden Zone's $4 million revolving credit facility, which expires
December 11, 1999, were $11.6 million, $.9 million, and $.9 million,
respectively, at March 31, 1999, all of which could be borrowed under the terms
of the indenture.  Keystone's $55 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 quarter of 1999, the Company's operating activities used
approximately $13.9 million of cash compared to $10.9 million in the first
quarter of 1998 due primarily to lower earnings.

     During 1997, the Company commenced a $75 million capital improvement plan
to upgrade certain of its plant and equipment and eliminate production capacity
bottlenecks in order to reduce costs and improve production efficiency.
Keystone substantially completed the capital improvement plan during 1998.  As
such, capital expenditures in the 1999 first quarter were substantially less
than capital expenditures during the 1998 first quarter. During the first
quarter of 1999, the Company made capital expenditures of approximately $6.5
million as compared to $16.2 million in the 1998 first quarter.  Capital
expenditures for 1999 are currently estimated to be approximately $28 million
and are related primarily to upgrades and debottlenecking of production
equipment.  These capital expenditures will be funded using borrowing
availability under the Company's revolving credit facilities.

     At March 31, 1999, the Company's financial statements reflected accrued
liabilities of $16.1 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.

     In May 1999, Keystone announced it had agreed to enter into a joint venture
with an unrelated entity to operate a scrap recycling operation at Keystone's
facility in Peoria, Illinois.  See Note 2 to the Consolidated Financial
Statements.

     The Company 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.  The Company 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.  The Company 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.  The Company's
ability to incur new debt in the future is limited by the terms of the indenture
related to the 9 5/8% Senior Secured Notes.

     Approximately 1,700 of the Company's employees in Peoria, Illinois are
represented by the Independent Steel Workers Alliance ("ISWA").  Upon expiration
of the then existing collective bargaining agreement on May 3, 1999, the Company
and the ISWA entered into an extension of the agreement until May 10, 1999.  On
May 8, 1999, ISWA membership ratified a new three year agreement with the
Company that provides for, among other things, increased wages and pension
benefits for the membership.

     Management believes the cash flows from operations together with the funds
available under the Company's revolving credit facilities will provide
sufficient funds to fund the anticipated needs of its operations for the year
ending December 31, 1999.  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, working capital
requirements, 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.

Year 2000 Issue

     As a result of certain computer programs being written using two digits
rather than four to define the applicable year, any of the Company's computer
programs that have date sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000 (the "Year 2000 Issue").  This could
result in a system failure or miscalculations causing disruptions of operations,
including, among other things, a temporary inability to process transactions,
send invoices or engage in normal business activities. Such failures could
materially and adversely affect the Company's results of operations, liquidity
and financial condition.

     The Company is in the process of taking an inventory of its information
systems to determine the modifications to existing software and new software
required to mitigate any Year 2000 Issues.  The Company's evaluation includes
information systems infrastructure, financial and administrative systems,
process control and manufacturing operating systems as well as significant
vendors and customers.  The Company expects this inventory will be completed
during the 1999 second quarter.  Because the majority of Keystone's significant
information systems have recently been installed or updated, many of the
Company's systems and related software are already year 2000 compliant.
     Keystone is utilizing both internal and external sources to reprogram or
replace and test its software and/or hardware with imbedded chips and the
Company expects to have its evaluation completed by the end of the third quarter
of 1999 and required modifications completed prior to December 31, 1999.

     Although the Company expects its critical systems to be compliant by
December 31, 1999, there is no assurance these results will be achieved.
However, the impact of a failure of any of the Company's information systems
would be mitigated to the extent that other alternate processes, including
manual processes, were able to meet processing requirements.  Presently,
Keystone expects alternate procedures would be able to meet the Company's
processing needs.  In addition, excluding recent equipment additions that are
year 2000 compliant, a significant portion of Keystone's plant and equipment is
aged and doesn't include imbedded chip technology susceptible to Year 2000
Issues.

     Keystone relies on third parties for raw materials, utilities,
transportation and other key services.  In addition, the Company is dependent
upon its customers for cash flow. The Company has initiated formal
communications with its suppliers and customers to determine the extent to which
the Company is vulnerable to those third parties' failure to eliminate their own
Year 2000 Issues.  Notwithstanding the Company's efforts, the ability of the
Company to affect the Year 2000 Issues preparedness of such customers and
suppliers is limited.  Keystone presently expects to complete these third party
communications during the 1999 second quarter and will at that time begin
developing contingency plans for potential non-compliance by these third
parties.  Year 2000 Issues that adversely impact these third parties could also
affect the operations of the Company.  There can be no assurance the systems of
other companies on which the Company's systems rely will be timely converted, or
that a failure to convert by another company, or a conversion that is
incompatible with the Company's systems, would not have a material adverse
effect on the Company.

     Because the Company has not completed the evaluation of its Year 2000
Issue, it is not able to quantify the costs that may be incurred in order to
eliminate any Year 2000 Issues.  The total costs that will be incurred by
Keystone in connection with resolving its Year 2000 Issues will be impacted by
the Company's ability to successfully identify its Year 2000 Issues, the level
of effort required to remediate the issue and the ability of third parties to
successfully address their own Year 2000 Issues.  Total costs incurred to date
relative to the remediation of the Company's Year 2000 Issues have been expensed
as incurred and have not been material.

    Although not anticipated, the most reasonably likely worst-case scenario of
failure by the Company or its key suppliers or customers to become year 2000
compliant would be short-term slowdown or cessation of manufacturing operations
at one or more facilities and a short-term inability on the part of the Company
to process orders and billings in a timely manner, and to deliver product to
customers.

     The costs of the project and the date on which the Company plans to
complete its year 2000 assessment and remediation are based on management's
estimates, which were derived utilizing numerous assumptions of future events
including the continued availability of certain resources, third party
modification plans and other factors.  However, there can be no guarantee that
these estimates will be achieved and actual results could differ significantly
from those plans.  Specific factors that might cause differences from
management's estimates include, but are not limited to, the availability and
cost of personnel trained in this area, the ability to locate and correct
relevant computer codes, and similar uncertainties.  Management believes the
Company is devoting the necessary resources to identify and resolve significant
Year 2000 Issues in a timely manner.

PART II.

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 6. Exhibits and Reports on Form 8-K.


(a) The following exhibits are included herein:

    10.1*--Form of deferred compensation agreement between Registrant and
          certain executive officers.

    27.1 --Financial Data Schedule for the three month period ended
          March 31, 1999.

    * Management contract, compensation plan or agreement.

(b) Reports on Form 8-K filed during the quarter ended March 31, 1999:

     None
                              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:  May 13, 1999             By /s/Harold M. Curdy                

                                  Harold M. Curdy
                                  Vice President - Finance/Treasurer
                                  (Principal Financial Officer)


Date:  May 13, 1999             By /s/Bert E. Downing, Jr.           

                                  Bert E. Downing, Jr.
                                  Corporate Controller
                                  (Principal Accounting Officer)