SECURITIES AND EXCHANGE COMMISSION
                    Washington, D. C.  20549
  
  
  [X]   QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
         SECURITIES EXCHANGE ACT OF 1934
  
       For the quarterly period ended September 30, 1996
  
                               OR
  
  [ ]   TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
       SECURITIES EXCHANGE ACT OF 1934
  
  For the transition period from                to             
  
                 Commission File Number 0-3855
  
  
                      LACLEDE STEEL COMPANY             
     (Exact name of Registrant as specified in its charter)
  
            Delaware                        43-0368310    
  (State or other jurisdiction of       (I.R.S. Employer
  incorporation or organization)        Identification No.)
  
  
      One Metropolitan Square, St. Louis, Missouri  63102
            (Address of principal executive offices)
                           (Zip code)
  
  
                          314-425-1400                         
      (Registrant's telephone number, including area code)
  
                                                                  
   (Former name, former address and former fiscal year, if
  changed since last report)
   
     Indicate by check mark whether the registrant (1) has
  filed all reports required to be filed by Section 13 or 15(d)
  of the Securities Exchange Act of 1934 during the preceding 12
  months (or for such shorter period that the registrant was
  required to file such reports), and (2) has been subject to
  such filing requirements for the past 90 days.
  
    Yes   X      No      
  
     As of October 31, 1996 there were 4,056,140 shares of
    $0.01 par value common stock outstanding.<PAGE>



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


                                         Third Quarter EndedYear to Date
                                         September 30,      September 30,
                                         1996     1995      1996     1995

Net sales                                  83,630   76,561   251,041  244,746

Costs and expenses:
     Cost of products sold                 80,836   70,568   240,139  217,492
     Selling, general and administrative    3,658    3,516    10,538   10,647
     Depreciation                           1,924    2,118     5,830    6,121
     Interest expense, net                  2,740    2,607     8,336    7,308
     Gain on sale of subsidiary stock          --       --        --     (728)
          Total costs and expenses         89,158   78,809   264,843  240,840

Earnings (loss) before income taxes        (5,528)  (2,248)  (13,802)   3,906

Provision (credit) for income taxes        (2,138)    (900)   (5,336)   1,378

Net earnings (loss)                        (3,390)  (1,348)   (8,466)   2,528

Retained earnings (deficit) at beginning   (7,391)  11,698    (2,315)   7,822

Retained earnings (deficit) at end of per (10,781)  10,350   (10,781)  10,350

Net earnings (loss) per share               (0.84)   (0.34)    (2.09)    0.62


















                  - 1 -

<PAGE>



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


                                                          Sep. 30,   Dec. 31,
                                                          1996       1995

Current Assets:
    Cash and cash equivalents                                 143        161
    Accounts receivable, less allowances                   40,601     37,287
    Prepaid expenses                                          427        744
    Income taxes recoverable                                   --      1,479
    Inventories:
        Finished                                           52,307     56,377
        Semi-finished                                      25,458     28,683
        Raw materials                                       8,209      8,415
        Supplies                                           14,786     13,807
        Total inventories                                 100,760    107,282

            Total Current Assets                          141,931    146,953




Non-Current Assets:
    Intangible pension asset                               15,909     17,409
    Other intangible assets                                 2,299      2,407
    Bond funds in trust                                     2,385      2,385
    Prepaid pension contributions                           5,631      6,586
    Deferred income taxes                                  49,468     44,062
    Notes receivable                                        3,600         --
    Other                                                   3,655      3,785
            Total Non-Current Assets                       82,947     76,634




Plant and Equipment, at cost                              245,335    243,573
    Less - accumulated depreciation                       122,709    117,382
            Net Plant and Equipment                       122,626    126,191





Total Assets                                              347,504    349,778

                          - 2 -
<PAGE>






           LIABILITIES AND STOCKHOLDERS' EQUITY



                                                          Sep. 30,   Dec. 31,
                                                          1996       1995

Current Liabilities:
    Accounts payable                                       44,874     31,617
    Accrued compensation                                    6,164      7,667
    Current portion of long-term debt                       2,484      2,459
    Accrued costs of pension plans                         13,327     15,449
    Other                                                   1,642      2,002
            Total Current Liabilities                      68,491     59,194


Non-Current Liabilities:
    Accrued costs of pension plans                         62,112     67,123
    Accrued postretirement medical benefits                81,610     81,431
    Other                                                   6,158      6,721
            Total Non-Current Liabilities                 149,880    155,275


Long-Term Debt:
    Bank revolving credit                                  82,870     84,541
    Bank term loan                                          5,706      6,780
    Revenue bonds                                          24,415     25,470
    Other                                                   2,000      2,000
            Total Long-Term Debt                          114,991    118,791


Stockholders' Equity:
    Preferred stock, without par value, authorized
      2,000,000 shares with 416,667 issued                     83         --
    Common stock, $13.33 par value, authorized
      5,000,000 shares with 4,056,140 shares issued        54,081     54,081
    Capital in excess of par value                          6,254        247
    Retained earnings (deficit)                           (10,781)    (2,315)
    Minimum pension liability adjustment                  (35,495)   (35,495)
            Total Stockholders' Equity                     14,142     16,518



Total Liabilities and Stockholders' Equity                347,504    349,778



                          - 3 -
<PAGE>



LACLEDE STEEL COMPANY
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

(In Thousands)

                                                 Nine Months Ended
                                                 September 30,
                                                 1996       1995

Cash flows from operating activities:
 Net earnings (loss)                              (8,466)     2,528
 Adjustments to reconcile net earnings (loss) to
    net cash provided by (used in) operating activities:
      Depreciation                                 5,830      6,121
      Gain on sale of subsidiary stock                --       (728)
      Change in deferred income taxes             (5,406)       191
 Changes in assets and liabilities that
    provided (used) cash:
       Accounts receivable                        (3,314)     4,972
       Inventories                                 6,522    (11,693)
       Accounts payable and accrued expenses      12,589    (11,205)
       Pension cost less than funding             (4,678)    (2,211)
       Accrued postretirement medical benefits       179        320
       Other assets and liabilities                  354        181
  Net cash provided by (used in) operating activi  3,610    (11,524)


Cash flows used in investing activities:
  Capital expenditures                            (9,778)    (8,947)
  Proceeds from sale of equipment                  4,000         --
  Net cash used in investing activities           (5,778)    (8,947)

Cash flows from financing activities:
  Net borrowings (repayments) under revolving cre (1,671)    19,785
  Payments on long-term debt                      (2,104)    (2,130)
  Proceeds from long term debt                        --      2,000
  Proceeds from sale of subsidiary stock              --      1,000
  Proceeds from issuance of preferred stock        6,090         --
  Payment of financing costs                        (165)      (181)
  Net cash provided by financing activities        2,150     20,474

Cash and cash equivalents:
  Net increase (decrease) during the period          (18)         3
  At beginning of year                               161        159
  At end of period                                   143        162




- 4 -
<PAGE>
            NOTES TO CONSOLIDATED FINANCIAL STATEMENTS


NOTE 1 - GENERAL

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


NOTE 2 - SALE OF STOCK OF SUBSIDIARY
  
  In the second quarter of 1995 the Company completed the sale of
  approximately 3% of the common stock of its subsidiary, Laclede
  Mid America Inc.  Accordingly a non-taxable gain of $728,000
  was recognized, which represents the excess of the sales price
  over the net book value of the stock sold.


NOTE 3 - EARNINGS PER SHARE

  Earnings per share amounts have been calculated based on
  weighted average shares outstanding of 4,056,140.


NOTE 4 - INCOME TAXES

  The provision for income taxes represents an effective combined
  federal and state tax rate of 39% for the nine months ended
  September 30, 1996 and 35% for the nine months ended September
  30, 1995.  The lower effective rate in 1995 reflects the non-taxable gain
  on sale of subsidiary stock.


NOTE 5 - CAPITAL STOCK

  In July 1996 the Company issued 416,667 shares of Series A 6%
  preferred stock to Ivaco Inc. and the executive officers of the
  Company for $6,090,000, after expenses.  This transaction
  resulted in an increase in Capital in excess of par value of
  $6,006,667.  On October 28, 1996, at a special meeting of the
  stockholders, an amendment was approved to the Company's
  Certificate of Incorporation which reduced the par value of
  each share of common stock from $13.33 per share to $0.01 per 




                              - 5 -<PAGE>
  
  share and increased the number of authorized common stock
  shares from 5,000,000 shares to 25,000,000 shares.  The
  stockholders also approved the recapitalization of the
  Company's Series A 6% preferred stock.  At such time each share
  of the preferred stock became convertible into common stock at
  the option of the holder at a conversion price of $3.20 into
  4.69 shares of common stock.

The financial results for 1996 are subject to annual audit.















































                              - 6 -<PAGE>

ITEM 2.   MANAGEMENT'S DISCUSSION & ANALYSIS OF
          FINANCIAL CONDITION AND RESULTS OF OPERATIONS

                 Liquidity and Capital Resources

  In the first nine months of 1996 operating activities provided
$3.6 million in cash.  Capital expenditures were $9.8 million,
and contributions to Company pension plans totaled $12.7 million. 
Increases in accounts receivable of $3.3 million were more than
offset by decreases in inventory of $6.5 million, while accounts
payable and accrued expenses increased by $12.6 million. 
Proceeds from a sale-leaseback transaction increased cash flow by
$4.0 million in the second quarter.  Net working capital
decreased by $14.3 million and the ratio of current assets to
current liabilities was 2.1 to 1.0 at September 30, 1996.

  In July 1996, the Company issued a total of $6.25 million in
Series A Preferred Stock to its largest stockholder, Ivaco Inc.,
and to executive officers of the Company.  On October 28, 1996,
at a special meeting of the stockholders, an amendment was
approved to the Company's Certificate of Incorporation which
reduced the par value of each share of common stock from $13.33
per share to $0.01 per share and increased the number of 
authorized common stock shares from 5,000,000 shares to
25,000,000 shares.  The stockholders also approved the
recapitalization of the Company's Series A 6% preferred stock to
convertible preferred stock.  At such time each share of the
preferred stock became convertible into common stock at the
option of the holder at a conversion price of $3.20 into 4.69
shares of common stock.  In connection with the sale of Series A
Preferred Stock to Ivaco Inc. and to executive officers of the
Company, the Company was required to use its best efforts to
obtain stockholder approval of the amendment to the Company's
Certificate of Incorporation.  In addition such approval was
necessary in order for the Company to pursue a rights offering to
all of the Company's stockholders, entitling all such
stockholders to subscribe for Series A Preferred Stock (the
"Rights Offering").  

  The Company, however, has postponed the Rights Offering in
order to allow time to improve recent operating results.  In this
regard the Company is studying a number of cost reduction and
productivity improvement programs.  The Company currently
anticipates that a substantial number of its programs will be
implemented by the end of 1996.  Cost reductions will include
areas which the Company does not usually review including
compensation and work force related issues and issues concerning
employee benefits.  The Company does not presently intend to
proceed with the Rights Offering until these programs have been
implemented and operating results have reached satisfactory
levels.  There can be no assurance, however, when or if the
Company will proceed with a Rights Offering.




                              - 7 -<PAGE>
  At September 30, 1996, $82.9 million in borrowings were
outstanding under the Company's revolving credit facility. 
Amounts available under this facility were utilized early in the
fourth quarter to cover outstanding short-term commitments,
primarily trade accounts payable.

  The Company has reached an agreement with its principal lenders
to amend its Loan and Security Agreement effective September 30,
1996, obtaining waivers of financial covenants relating to
operating losses and net worth for the third quarter of 1996, and
modifying such covenants with regard to the year 1996.  In the
event further amendment to financial covenants is necessary
because operating losses exceed the limits of the amended
covenants, there can be no assurance that the Company will be
able to obtain such amendment.

  Under terms of the Loan and Security Agreement, amounts
available based on Company inventory levels will be reduced by
$3.8 million by December 31, 1996.  The Company believes that
planned inventory reductions will equal or exceed the reduction
in revolving credit availability and, thus, this reduction should
not affect current availability.  During the last three months of
1996 the Company anticipates capital expenditures of
approximately $1.2 million, and contributions to pension plans of
$2.3 million.  Based on current sales prices and currently
anticipated productivity improvements, normal operating
activities will generate sufficient cash flow to finance these
expenditures.  However, the Company may be required to extend
payment terms for certain suppliers, and is currently considering
the sale of certain assets in order to improve cash flow.

                      Results of Operations

  Net sales increased by $6.3 million or 2.6% in the first nine
months of 1996 compared to the first nine months of 1995.  This
reflects a 15.6% increase in steel shipments, offset by a 12.6%
decrease in average selling prices for steel products.  Cost of
products sold increased by $22.6 million or 10.4% in the first
nine months of 1996 compared to the first nine months of 1995. 
The increase in cost of products sold reflects the increase in
steel shipments and a change in the mix of products sold.  The
overall decline in selling prices resulted in a significant
reduction in product margins and was the most significant reason
for the first nine months' operating losses.

  Third quarter 1996 net sales increased by $7.1 million, or 9.2%
over the third quarter of 1995, reflecting a 19.5% increase in
steel shipments, partially offset by a decrease in average
selling prices of 9.1%.  The higher shipping volume includes an
increase in shipments of semi-finished steel.  The lower average
selling prices reflect both decreases in product selling prices
and the increase in shipments of semi-finished steel, sold at
lower prices than the Company's finished products.


                              - 8 -<PAGE>
  

  Cost of products sold in the third quarter of 1996 increased by
$10.3 million or 14.6% over the comparable period of 1995.  The
increase in cost of products sold was proportionately less than
the increase in shipments because of the change in product mix
and lower production and maintenance costs per ton in the third
quarter of 1996.

  The increase in interest expense in the first nine months of
1996 is primarily the result of an increase in bank borrowings
and an increase in the average interest rate of approximately 70
basis points.













































                              - 9 -<PAGE>
                   

PART II - OTHER INFORMATION


ITEM 1.   LEGAL PROCEEDINGS.

          None

ITEM 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

          A special meeting of the stockholders was held on
          October 28, 1996.

          Proposals voted upon:

          (1)  Approving the amendment to the Certificate of
               Incorporation of the company to provide for a
               reduction of the par value per share of the Common
               Stock from $13.33 per share to $0.01 per share.

             For      Against   Abstention   Withheld
          
          3,421,556   101,281     33,381        --

          (2)  Approving the amendment to the Certificate of
               Incorporation of the Company to provide for an
               increase in authorized Common Stock from 5,000,000
               shares to 25,000,000 shares.

             For      Against   Abstention   Withheld
          
          3,321,982    87,750     35,919      110,567

          (3)  Approving the recapitalization of the Company's
               Series A Preferred Stock, no par value per share,
               such that the Series A Preferred Stock owned by
               Ivaco Inc. and certain members of management of
               the Company is convertible into Common Stock at
               the option of the holder of such Series A
               Preferred Stock; effective upon the amendment of
               the Company's Certificate of Incorporation
               provided for in Item 1 and Item 2 and pursuant to
               Section 12 of the Company's Certificate of
               Designation for Series A Preferred Stock filed
               with the Secretary of State of the State of
               Delaware on July 30, 1996.

             For      Against   Abstention   Withheld
          
          2,713,417    97,173     38,721      706,907







                              - 10 -<PAGE>
ITEM 6.   EXHIBITS AND REPORTS ON FORM 8-K.

          (a)  Exhibits

  (3)     Registrant's Restated Certificate of Incorporation
          dated October 28, 1996.

  (4)(a)  Registrant's Loan and Security Agreement dated as of
          September 7, 1994.  (Incorporated by reference to
          Exhibit (4)(a) in Registrant's quarterly report on Form
          10-Q for September 30, 1994.)

  (4)(b)  First Amendment dated February 15, 1995 to Registrant's
          Loan and Security Agreement.  (Incorporated by
          reference to Exhibit (4)(b) in Registrant's Annual
          Report on Form 10-K for the fiscal year ended December
          31, 1994.)

  (4)(c)  Second Amendment dated May 10, 1995 to Registrant's
          Loan and Security Agreement.  (Incorporated by
          reference to Exhibit (4)(c) in Registrant's Quarterly
          Report on Form 10-Q for the period ended September 30,
          1995.)

  (4)(d)  Third Amendment dated June 1, 1995 to Registrant's Loan
          and Security agreement.  (Incorporated by reference to
          Exhibit (4)(c) in Registrant's Quarterly Report on Form
          10-Q for the period ended September 30, 1995.)

  (4)(e)  Fourth Amendment dated December 7, 1995 to Registrant's
          Loan and Security Agreement.  (Incorporated by
          reference to Exhibit (4)(e) in Registrant's Annual
          Report on Form 10-K for the fiscal year ended December
          31, 1995.)

  (4)(f)  Fifth Amendment dated January 26, 1996 to Registrant's
          Loan and Security Agreement.  (Incorporated by
          reference to Exhibit (4)(f) in Registrant's Annual
          Report on Form 10-K for the fiscal year ended December
          31, 1995.)

  (4)(g)  Sixth Amendment dated June 26, 1996 to the Company's
          Loan and Security Agreement.  (Incorporated by
          reference to Exhibit (4)(g) in Registrant's Quarterly
          Report on Form 10-Q for the period ended June 30,
          1996.)

  (4)(h)  Seventh Amendment dated July 30, 1996 to the Company's
          Loan and Security Agreement.  (Incorporated by
          reference to Exhibit (4)(h) in Registrant's Quarterly
          Report on Form 10-Q for the period ended June 30,
          1996.)



                              - 11 -<PAGE>

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

          (b)  Reports on Form 8-K.

          No reports on Form 8-K have been filed during the
          quarter.











































                              - 12 -<PAGE>







                            SIGNATURES   



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




                      LACLEDE STEEL COMPANY       
                           (Registrant)




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

                   Duly Authorized Officer and
                   Principal Financial Officer






Date:        November 14, 1996        
<PAGE>