<PAGE>   1
                                                                    Exhibit 10.6


                     AMENDMENT NO. 2 TO SECOND AMENDED AND
                      RESTATED REVOLVING CREDIT AGREEMENT


               AMENDMENT NO. 2 TO SECOND AMENDED AND RESTATED REVOLVING
AGREEMENT, dated as of September 30, 1998 (the "Amendment No. 2"), by and among
GENEVA STEEL COMPANY, a Utah corporation (the "Borrower"), the financial
institutions listed on the signature pages to the Credit Agreement (as defined
below) (each individually a "Lender" and collectively the "Lenders"), the issuer
party thereto (the "Issuer"), CITICORP USA, INC., a Delaware corporation
("CUSA"), as agent under the Credit Agreement for itself and for the Lenders (in
such capacity, the "Agent"), and HELLER FINANCIAL, INC., as co-agent (the
"Co-Agent"). All capitalized terms used but not otherwise defined in this
Amendment shall have the meanings assigned to such terms in the Credit Agreement
referred to below.

                              W I T N E S S E T H:

               WHEREAS, the Borrower, the Lenders, the Issuer, the Agent and the
Co-Agent have entered into a Second Amended and Restated Revolving Credit
Agreement dated as of May 14, 1996, as amended by an Amendment dated as of May
1, 1998 (the "Credit Agreement");

               WHEREAS, the Borrower and the Majority Lenders pursuant to
Section 10.1 of the Credit Agreement desire to amend the Credit Agreement; and

               WHEREAS, the Majority Lenders are willing to amend the Credit
Agreement in the manner and on the terms and conditions set forth herein;

               NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein, the parties hereto hereby agree as follows:

               SECTION 1. Amendments to the Credit Agreement.  Subject to the
satisfaction of the conditions to effectiveness in Section 3 hereof, the Credit
Agreement shall be amended as follows:

               (a) The following definitions in Section 1.1 shall be amended and
restated in their entirety to read as follows:

               "Borrowing Base" means, at any time, the sum of (a) 85% of
Eligible Receivables at such time plus (b) the lesser of (i) such amount of the
Eligible Inventory at such time as determined in accordance with the advance
rate formulae set forth on Schedule I and (ii) the Inventory Availability
Sublimit, less, in each case, 


<PAGE>   2

such reserves as the Agent, in its sole discretion, may deem appropriate, plus
(c) all cash on deposit at such time in the Cash Collateral Account and the L/C
Cash Collateral Account; provided, however, that the aforementioned advance
rates in respect of Eligible Inventory may be prospectively adjusted by the
Agent from time to time upon at least five Business Days' prior written notice
to the Borrower to conform to the Agent's regular business practices and
policies applicable to asset based loans with advance rates based on current
assets in effect from time to time, which practices and policies may be changed
by the Agent in its sole discretion; provided, however, that any increase in the
advance rates above those set forth on Schedule I shall require the written
consent of Lenders having two-thirds or more of the Revolving Credit
Commitments, and any changes with respect to reserves (as contemplated above) to
be evidenced by notice to the Borrower and applicable prospectively on the
Borrowing Base Certificate following such notice.

               "EBITDA" means, for any Person and its Restricted Subsidiaries
for any period, the Net Income (Loss) of such Person and its Restricted
Subsidiaries for such period taken as a single accounting period, plus (a) the
sum of the following amounts of such Person and its Restricted Subsidiaries for
such period determined on a consolidated basis in accordance with GAAP to the
extent included in the determination of such Net Income (Loss): (i) depreciation
expense, (ii) amortization expense, (iii) other non-cash charges, (iv) Net
Interest Expense, (v) provision for income taxes and similar taxes, and (vi)
extraordinary losses, less (b) the sum of the following amounts of such Person
and its Restricted Subsidiaries determined on a consolidated basis in accordance
with GAAP to the extent included in the determination of such Net Income (Loss):
(i) extraordinary gains, (ii) the Net Income (Loss) (which, if it is a negative,
shall be added) of any other Person that is accounted for by the equity method
of accounting, after deducting the amount of dividends or distributions paid by
such other Person to such Person, (iii) the Net Income (Loss) (which, if it is a
negative, shall be added) of any other Person acquired by such Person or a
Restricted Subsidiary of such Person in a transaction accounted for as a pooling
of interests for any period prior to the date of such acquisition, and (iv)
other non-operating income.

               "Net Worth" of any Person means, at any date, the difference
between Total Assets of such Person at such date and Total Liabilities
(excluding any such liabilities resulting from accrued but unpaid dividends on
the Borrower's Stock) of such Person at such date.



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<PAGE>   3

               "Tangible Net Worth" of any Person means, at any date, the Net
Worth of such Person at such date, excluding, however, from the determination of
the Total Assets of such Person at such date (to the extent the same are
included in the determination of Total Assets and without duplication), (i) all
goodwill, organizational expenses, research and development expenses,
trademarks, trade names, copyrights, patents, patent applications, licenses and
rights in any thereof, and other similar intangibles, (ii) all deferred charges
or unamortized debt discount and expense, (iii) all reserves carried and not
deducted from assets or carried as a liability, (iv) treasury stock and capital
stock of such Person and its Restricted Subsidiaries, and all obligations or
other securities of, or capital contributions to, or investments in or advances
or loans to, any Unrestricted Subsidiary of such Person or any of its
Subsidiaries, (v) securities which are not readily marketable, (vi) cash held in
a sinking or other analogous fund established for the purpose of redemption,
retirement, defeasance or prepayment of any Stock, (vii) any write-up in the
book value of any asset resulting from a revaluation thereof, and (viii) any
items not included in clauses (i) through (vii) above which are treated as
intangibles in conformity with GAAP.

               (b) The following definition in Section 1.1 shall be amended as
follows:

                      Paragraph (q) of the definition of "Eligible Receivables"
               is amended by inserting after the words "Accounts of such account
               debtor" in the first line thereof the words "(other than Accounts
               created under the Mannesman Agreement)".

               (c) Section 5.1 shall be amended and restated in its entirety to
read as follows:

               "5.1. Maintenance of Tangible Net Worth . The Borrower shall
maintain, during each of the periods set forth below, Tangible Net Worth no less
than the sum of (a) the amounts set forth below plus (b) an amount equal to 75%
of the net (after payment of fees, commissions, expenses and the like) cash
proceeds received by the Borrower from the sale of Additional Equity since the
date hereof:



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<PAGE>   4

<TABLE>
<CAPTION>
                                                                   Minimum
                             Period                                 Amount
                             ------                                 ------
<S>                                                            <C>

               April 30, 1996 - July 30, 1996                    $74,200,000
               July 31, 1996 - October 30, 1996                  $74,200,000
               October 31, 1996 - January 30, 1997               $74,200,000
               January 31, 1997 - April 29, 1997                 $72,200,000
               April 30, 1997 - July 30, 1997                    $69,700,000
               July 31, 1997 - October 30, 1997                  $67,200,000
               October 31, 1997 - January 30, 1998               $65,000,000
               January 31, 1998 - April 29, 1998                 $65,000,000
               April 30, 1998 - July 30, 1998                    $65,000,000
               July 31, 1998 - September 30, 1998               $110,000,000
               October 1, 1998 - October 31, 1998               $110,000,000
               November 1, 1998 - November 30, 1998             $200,000,000
               December 1, 1998 - December 31, 1998             $200,000,000
               January 1, 1999 - January 30, 1999               $200,000,000
               January 31, 1999 - April 29, 1999                $200,000,000
               April 30, 1999 - July 30, 1999                   $200,000,000
               July 31, 1999 - October 30, 1999                 $200,000,000
               October 31, 1999 - January 30, 2000              $200,000,000
               January 31, 2000 - April 29, 2000                $200,000,000
               April 30, 2000 and thereafter                    $200,000,000"
</TABLE>


               (d) Section 5.3 shall be amended and restated in its entirety to
read as follows:

               "5.3. EBITDA to Cash Interest Expense Ratio . The Borrower shall
achieve as of the last day of each Fiscal Quarter commencing with the Fiscal
Quarter ending June 30, 1996, determined on the basis of the four Fiscal
Quarters ending on the date of determination, a ratio of (a) EBITDA for such
period to (b) Cash Interest Expense for such period, not less than the ratio set
forth below:



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<TABLE>
<CAPTION>
               For the Fiscal                             Minimum
               Quarter Ending                             Ratio Required 
               --------------                             -------------- 
<S>                                                       <C>
               June 30, 1996                              1.40 : 1.0
               September 30, 1996                         1.40 : 1.0
               December 31, 1996                          1.40 : 1.0
               March 31, 1997                             1.40 : 1.0
               June 30, 1997                              1.50 : 1.0
               September 30, 1997                         1.50 : 1.0
               December 31, 1997                          1.50 : 1.0
               March 31, 1998                             1.60 : 1.0
               June 30, 1998                              1.75 : 1.0
               September 30, 1998                         1.82 : 1.0
               December 31, 1998                          2.15 : 1.0
               March 31, 1999                             2.30 : 1.0
               June 30, 1999                              2.40 : 1.0
               September 30, 1999                         2.60 : 1.0
               December 31, 1999                          2.75 : 1.0
               March 31, 2000 and thereafter              3.00 : 1.0"
</TABLE>

               (e) Notwithstanding the provisions of Section 6.11 of the Credit
Agreement, the financial statements of the Borrower due on December 31, 1998, in
respect of the month of November 1998, shall be furnished to the Lenders no
later than January 7, 1999.

               SECTION 2.   Representations and Warranties.

               The Borrower hereby represents and warrants to the Lenders that
(i) the execution, delivery and performance of this Amendment has been duly
authorized by all requisite corporate action on the part of the Borrower and
will not violate the certificate of incorporation or by-laws of the Borrower;
(ii) this Amendment is the legal, valid, binding and enforceable obligation of
the Borrower, enforceable against it in accordance with its terms; (iii) the
representations and warranties contained in the Credit Agreement, as amended by
this Amendment No. 2, are true and correct in all material respects on and as of
the date hereof as though made on and as of such date, except to the extent that
any such representation or warranty expressly relates to an earlier date and for
changes therein permitted or contemplated by the Credit Agreement, as amended by
this Amendment No. 2; and (iv) after giving effect to this 



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Amendment, no Default or Event of Default under the Credit Agreement has
occurred and is continuing.

               SECTION 3.    Conditions to Effectiveness.

               This Amendment shall become effective (the "Effective Date")
when, and only when, (i) the Borrower and the Majority Lenders shall have signed
a copy hereof (whether the same or different copies), (ii) the Lenders shall
have received certified resolutions of the Board of Directors of the Borrower
authorizing the transactions contemplated hereunder and (iii) the Lenders shall
have received a certificate from a Responsible Officer of the Borrower
certifying that the representations and warranties set forth in Section 2 hereof
are true and correct on and as of the Effective Date.

               SECTION 4.    No Modification.

               This Amendment is limited as specified herein and, except as
provided herein, shall not constitute a modification, acceptance or waiver of
any other provision of the Credit Agreement or any other Loan Document, all of
which shall continue to be in full force and effect and are hereby ratified and
confirmed in all respects.

               SECTION 5.    Counterparts.

               This Amendment may be executed in any number of counterparts and
by the different parties hereto on separate counterparts, each of which when so
executed and delivered shall be an original, but all of which shall together
constitute one and the same instrument.

               SECTION 6.    References to Loan Documents.

               From and after the Effective Date, all references in the Credit
Agreement and each of the Loan Documents to the Credit Agreement shall be deemed
to be references to the Credit Agreement as modified hereby.



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<PAGE>   7



               SECTION 7.    Governing Law.

               THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK.

               SECTION 8.    Release.

               THE BORROWER HEREBY ACKNOWLEDGES THAT IT HAS NO DEFENSE,
COUNTERCLAIM, OFFSET, CROSS-COMPLAINT, CLAIM OR DEMAND OF ANY KIND OR NATURE
WHATSOEVER THAT CAN BE ASSERTED TO REDUCE OR ELIMINATE ALL OR ANY PART OF ITS
LIABILITY TO REPAY THE "OBLIGATIONS" OR TO SEEK AFFIRMATIVE RELIEF OR DAMAGES OF
ANY KIND OR NATURE FROM ANY LENDER. THE BORROWER HEREBY VOLUNTARILY AND
KNOWINGLY RELEASES AND FOREVER DISCHARGES EACH LENDER, ITS PREDECESSORS, AGENTS,
EMPLOYEES, SUCCESSORS AND ASSIGNS, FROM ALL POSSIBLE CLAIMS, DEMANDS, ACTIONS,
CAUSES OF ACTION, DAMAGES, COSTS, EXPENSES, AND LIABILITIES WHATSOEVER, KNOWN OR
UNKNOWN, ANTICIPATED OR UNANTICIPATED, SUSPECTED OR UNSUSPECTED, FIXED,
CONTINGENT, OR CONDITIONAL, AT LAW OR IN EQUITY, ORIGINATING IN WHOLE OR IN PART
ON OR BEFORE THE DATE THIS AGREEMENT IS EXECUTED, WHICH THE BORROWER MAY NOW OR
HEREAFTER HAVE AGAINST SUCH LENDER, ITS PREDECESSORS, AGENTS, EMPLOYEES,
SUCCESSORS AND ASSIGNS, IF ANY, AND IRRESPECTIVE OF WHETHER ANY SUCH CLAIMS
ARISE OUT OF CONTRACT, TORT, VIOLATION OF LAW OR REGULATIONS, OR OTHERWISE.



                            [signature pages follow]



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<PAGE>   8


               IN WITNESS WHEREOF, the parties hereto have duly executed and
delivered this Amendment as of the date first above written.


                                        GENEVA STEEL COMPANY


                                        By: /s/ Joseph A. Cannon
                                            ------------------------------------
                                            Name:  Joseph A. Cannon
                                            Title: Chief Executive Officer


                                        CITICORP USA, INC.,
                                        as Agent


                                        By: /s/ John Podkowski
                                            ------------------------------------
                                            Name:  John Podkowski
                                            Title: Attorney-in-Fact


                                        Lenders

                                        CITICORP USA, INC.


                                        By: /s/ John Podkowski
                                            ------------------------------------
                                            Name:  John Podkowski
                                            Title: Attorney-in-Fact




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<PAGE>   9


                                      GENERAL ELECTRIC CAPITAL CORPORATION


                                        By: /s/ J. K. Williams
                                            ------------------------------------
                                             Name:  Janet K. Williams
                                             Title: Duly Authorized Signatory


                                        IBJ SCHRODER BANK & TRUST COMPANY


                                        By: /s/ John Butera
                                            ------------------------------------
                                             Name:  John Butera
                                             Title: VP


                                        TRANSAMERICA BUSINESS CREDIT
                                        CORPORATION


                                        By: /s/ Michael Burns
                                            ------------------------------------
                                             Name:  Michael S. Burns
                                             Title: Senior Vice President


                                        CORESTATES BANK, N.A.


                                        By: /s/ Jennifer Avrigian
                                            ------------------------------------
                                             Name:  Jennifer Avrigian
                                             Title: AVP




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<PAGE>   10

                                        HELLER FINANCIAL, INC.


                                        By: /s/ T. Bukowski
                                            ------------------------------------
                                             Name:  T. Bukowski
                                             Title: Sr. Vice Pres.


                                        MELLON BANK, N.A.


                                        By: /s/ Daniel K. Clancy
                                            ------------------------------------
                                             Name:  Daniel K. Clancy
                                             Title: Vice President


                                        LASALLE BUSINESS CREDIT, INC.


                                        By: /s/ Mark E. Landsem
                                            ------------------------------------
                                             Name:  Mark E. Landsem
                                             Title: Vice President


                                        PNC BUSINESS CREDIT


                                        By: /s/ Michael D. Shover
                                            ------------------------------------
                                             Name:  Michael D. Shover
                                             Title: Bank Officer


                                        NATIONSBANK, N.A.


                                        By: /s/ Melba B. Quizon
                                            ------------------------------------
                                             Name:  Melba B. Quizon
                                             Title: Vice President



                                       10
<PAGE>   11

                                        BNY Financial Corp. as successor in 
                                          interest to
                                        THE BANK OF NEW YORK
                                        COMMERCIAL CORPORATION


                                        By: /s/ Stephen V. Mangiante 
                                            ------------------------------------
                                             Name:  Stephen V. Mangiante
                                             Title: Vice President


                                        SANWA BUSINESS CREDIT
                                        CORPORATION


                                        By: /s/ Peter L. Skavla
                                            ------------------------------------
                                             Name:  Peter L. Skavla
                                             Title: Vice President


                                        CIT GROUP/BUSINESS CREDIT, INC.


                                        By: /s/ William Shiro
                                            ------------------------------------
                                             Name:  William Shiro
                                             Title: Assistant Vice President


                                        Issuer

                                        CITIBANK, N.A.


                                        By: /s/ John Podkowski
                                            ------------------------------------
                                            Name:  John Podkowski
                                            Title: Attorney-in-Fact





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