BIRMINGHAM STEEL CORPORATION ANNOUNCES 14% INCREASE IN NET INCOME.

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Oct. 14, 1997--

POSTS RECORD STEEL SHIPMENTS

Birmingham Steel Corporation (NYSE:BIR) today announced significantly increased net income and record steel shipments for the first quarter ended September 30, 1997. The Company reported net income of $7,245,000, or $0.24 per share, up 14% from $6,348,000, or $.22 per share, reported in the same period last year. Results for the first quarter of fiscal 1998 include pre-operating start-up expenses of $2.5 million, or approximately $0.05 per share, primarily related to the Company's new melt shop in Memphis, Tennessee. The Memphis melt shop is expected to begin start-up production in November 1997.

Net sales for the quarter rose 23% to $287,547,000 from $233,422,000 a year ago. The Company achieved record steel shipments of 837,000 tons, up 25% from 669,000 tons in the prior-year period. Shipment records were also established during the quarter for rebar (372,000 tons) and merchant products (231,000 tons).

Robert A. Garvey, Chairman and Chief Executive Officer, stated, "We are pleased to report improved earnings for the first quarter of fiscal 1998. With the exception of the Cleveland division, operating and financial results were generally in line with expectations. We were particularly pleased with the significant increase in overall shipments. Merchant product shipments rose 79% from the same period last year, reflecting the success of our strategy to penetrate new markets."

Garvey continued, "Because of an unexpected softening in automotive-related shipments, the financial performance at the Cleveland division was below expectations; however, significant operational and cost improvements were realized during the quarter. In addition, product quality issues that had previously hampered Cleveland's results have been virtually eliminated. Had shipments of SBQ (special bar quality products) been at expected levels, Cleveland would have been profitable.

"Business conditions in the steel industry remain strong," said Garvey. "Although volumes could be influenced by normal seasonal factors, we expect that healthy demand for steel products will continue in the second quarter.

"The new Memphis melt shop is on track for operational start-up in November. This $210 million facility will provide high quality SBQ semi-finished steel billets to Cleveland for substantially lower cost than current third party billet suppliers. Memphis will be ramping up production during the second and third fiscal quarters, and we expect the new melt shop to be producing at an annual rate of 800,000 tons by June 1998," Garvey concluded.

Birmingham Steel operates in the mini-mill sector of the steel industry and conducts operations at facilities located across the United States. The Company specializes in producing steel reinforcing bar, merchant products and SBQ (special bar quality) bar, rod and wire. The common stock of Birmingham Steel Corporation is traded on the New York Stock Exchange under the symbol "BIR."

Except for historical information, the matters described in this document, including statements concerning the Company's anticipated financial performance during the upcoming fiscal year, and the completion date and anticipated effect of capital projects currently in progress, are forward-looking statements within the meaning of the safe-harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including economic conditions, market demand factors, unanticipated start-up and operating expenses and start-up delays, financing considerations, and the performance of the various joint ventures in which the Company is involved, as well as other risks described from time to time in the Corporation's periodic and special filings with the Securities and Exchange Commission. Any forward-looking statements contained in this document speak only as of the date hereof, and the Corporation disclaims any intent or obligation to update such forward-looking statements. Comparisons of results for current and prior periods are not necessarily indicative of future performance and should not be relied on for any purpose other than as historical data. -0-

                  BIRMINGHAM STEEL CORPORATION
                      Financial Highlights
           (in thousands, except per share amounts)


                                              Three Months Ended
                                                 September 30,

                                               1997        1996
Revenues                                     $287,547    $233,422
Net income                                   $  7,245    $  6,348
Earnings per share                           $    .24    $    .22
Average shares outstanding                     29,685      28,625

CONTACT: Birmingham Steel Corp., Birmingham

J. Daniel Garrett, 205/970-1213