Birmingham Steel's SBQ Operation Reinstates Name of American Steel & Wire Corporation; Birmingham Steel Will Seek to Reestablish Cleveland Operation in SBQ Markets.

Business Editors

BIRMINGHAM, Ala.--(BUSINESS WIRE)--Jan. 11, 2000

Birmingham Steel Corporation (NYSE: BIR) today announced it will resume doing business in the SBQ (special bar quality) markets as American Steel & Wire Corporation, ("AS&W") the name under which the Company's Cleveland, Ohio, facilities previously operated until 1998. The Company said semi-finished steel billets for the Cleveland rolling facilities will be sourced from qualified third-party suppliers in order to support plans for increased SBQ shipments. Last month, the Company announced a temporary suspension of operations at its SBQ melt shop in Memphis, Tennessee, which had been unsuccessful in providing a reliable source of high-quality billets for Cleveland because of prolonged start-up problems.

John Correnti, Chairman and Chief Executive Officer of Birmingham Steel, said the Company is currently in discussions with potential third parties to supply billets for the Cleveland operation. "By securing a reliable supply of qualified billets over the next 60 days, we believe the Cleveland operation can begin reestablishing itself as the premier high-quality wire rod supplier in North America," said Correnti. According to Correnti, "Several major steel companies have indicated a desire to provide a long-term supply of billets to Cleveland."

Correnti noted that, until two years ago, AS&W was recognized as the supplier of choice for high-quality wire rod. However, according to Correnti, the loss of key employees and problems associated with the start-up of the Memphis melt shop have resulted in a decline in product mix and service. Correnti stated, "The Cleveland facilities are efficient and capable of producing 1.0 million annual tons of prime product. What the operation needs is a reliable supply of quality billets and customers. The SBQ market wants the AS&W product."

Correnti said that he had spoken with a number of SBQ customers who encouraged the Company's new management to retain the Cleveland operation. In December 1999, a dissident group of stockholders, led by Birmingham Steel's former chairman and CEO, Jim Todd, was successful in removing the Company's prior management and electing Correnti as Chairman and CEO. Birmingham Steel's prior management had announced plans to sell the SBQ operation, including the Cleveland plant.

In a letter to stockholders last month, Correnti said that Birmingham Steel would take significant measures to reduce the current cash drain caused by the SBQ operation. Effective January 1, the Company temporarily suspended operations at the Memphis melt shop for an indefinite period of time in order to preserve cash. The letter also advised stockholders the Company would be evaluating options for Cleveland.

"We believe that, with the help of our customers, we can quickly get the Cleveland operation to a breakeven cash performance level," said Correnti. "By eliminating Cleveland's negative cash flow, we can then focus on a number of opportunities in the SBQ markets." However, Correnti noted the Company is still receptive to the idea of selling or joint venturing its SBQ facilities "for the right opportunity and price."

Concerning the Company's decision to resume doing business in the SBQ markets as American Steel & Wire, Correnti remarked, "Customers associate the AS&W name with quality product and service. We will return to the standards which were maintained in the past by AS&W." However, Correnti said in order for the Company to successfully reestablish its SBQ business, qualified billet supply agreements and customer support will have to be secured over the next two months. Correnti said the Company's management will be devoting a significant amount of time during the coming weeks meeting with potential billet suppliers and SBQ customers.

"During the next 60 days, we will be making important decisions concerning the future of the AS&W operation in Cleveland," said Correnti. "By using qualified purchased billets, our world-class rolling facilities in Cleveland will be able to reclaim their previous position as supplier of the finest surface quality and dimensional tolerance products in the SBQ industry. Our overriding objectives, however, are to return Birmingham Steel to profitability and enhance shareholder value. We want to utilize the AS&W business in the best way to achieve our goals," Correnti 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 produces steel reinforcing bar, merchant products and SBQ 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 press release 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, equipment breakdowns or failures, as well as other risks described from time to time in the Company'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 Company disclaims any intent or obligation to update such forward-looking statements.