SCHEDULE 14A
                                 (Rule 14a-101)

                            SCHEDULE 14A INFORMATION

   Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act
                                    of 1934
                               (Amendment No.  )

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        Rule 14a-6(e)(2))
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[_]     Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12

                          BIRMINGHAM STEEL CORPORATION
                      -----------------------------------
                (Name of Registrant as specified in its charter)

                               ----------------
      (Name of person(s) filing proxy statement, if other than Registrant)

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[LOGO OF BIRMINGHAM STEEL CORPORATION]

[LETTERHEAD OF BIRMINGHAM STEEL CORPORATION]


                                                               November 22, 1999

Dear Birmingham Steel Stockholder:

   We are pleased to inform you that Institutional Shareholder Services (ISS),
the nation's leading proxy voting advisory firm, has issued a report
recommending that stockholders re-elect the Company's nominees for the Board of
Directors at the Annual Meeting of Stockholders on December 2nd.

   ISS, whose analyses and recommendations are closely followed by its 700
institutional and corporate clients and many other investors, urges
stockholders to reject the attempt by the dissident United Group to replace
Birmingham Steel's incumbent directors with the board slate put forth by the
United Group. In fact, ISS recommends that stockholders "discard the dissident
blue proxy card."

   In its carefully prepared written report, ISS points out that the decline in
Birmingham Steel's stock price did not begin with the arrival of the Company's
current management team in 1996, as the dissidents have suggested. ISS
recognizes that the stock price decline began in the summer of 1994, within
months of the November 1993 purchase of American Steel & Wire (AS&W), which
became the Company's Special Bar Quality (SBQ) division.

   Referring to former CEO James Todd, who is now a member of the dissident
group, the ISS report notes that "while returns to shareholders during the past
three-plus years have been dismal . . . the returns over the final two years of
the Todd era were even worse."

   ISS also recognizes that currently challenging industry conditions,
including overcapacity, flattening demand, import pressure and weak prices,
coupled with company-specific issues, "do not support further pursuit of the
[SBQ] business by BIR." The report also points out that fully half of
Birmingham Steel's independent directors joined the Company within the last two
years "and therefore cannot be fairly held accountable for the SBQ
performance."

   Noting that Birmingham Steel is highly leveraged and under the intense
scrutiny of its lenders, the ISS report says that "prudent investors should not
throw out the baby with the bathwater" by voting for a dissident group that
proposes to keep and continue to fund the SBQ operations.


   The report says that in the view of ISS, there is more risk in keeping the
SBQ assets and perpetuating the cash drain than in divesting them and reducing
remaining debt via cash flow generated from the Company's core mini-mill and
scrap operations.

   ISS concludes: "We therefore recommend that shareholders vote in favor of
the incumbent directors and reject the dissident slate of nominees." (emphasis
added)

   We are gratified that an objective, knowledgeable observer like ISS has
evaluated all aspects of this proxy fight and has validated what we have been
saying all along about the roots of the Company's difficulties in decisions and
commitments that started with the original purchase of AS&W in 1993, and about
the need to divest the SBQ division as part of our strategic restructuring.
Above all, ISS has concluded how important it is to the preservation and
enhancement of stockholder value to re-elect Birmingham Steel's incumbent Board
of Directors.

   Birmingham Steel's Board and management remain committed to building your
Company's value for you and all our stockholders. We believe we have been
taking the right strategic, operational and financial steps to achieve that
over-riding objective. And we believe that given the high credibility in which
ISS analyses and recommendations are held by hundreds of institutional and
corporate clients and countless other investors, the favorable recommendation
of ISS will be a significant factor in ensuring that our value-creation
objective will be achieved.

   As the Annual Meeting of Stockholders on December 2nd approaches--a meeting
that in a very real sense will determine the future of your Company--we urge
you to consider carefully these key facts:

  .  Birmingham Steel's core operations are strong and profitable.

  .  The performance of the Company's core operations has improved since the
     current management team first arrived beginning in early 1996.

  .  The dissident group nominees lack the necessary steel industry
     experience.

  .  Birmingham Steel simply cannot afford to keep and try to "fix" the SBQ
     business.

                                     * * *

   The future of Birmingham Steel and the value of your investment are in your
hands. You can vote for an experienced and dedicated incumbent Board and
management team or turn control over to a dissident group that includes seven
individuals who appear to have no steel industry experience. You can vote for
an incumbent Board and management who have developed and are already
implementing a well-thought-out strategic restructuring program that includes
the sale of the SBQ division--or for a dissident group that wants to keep SBQ
indefinitely and keep spending millions of dollars to "fix" it.


   IN SHORT, THE CHOICE IS YOURS. YOU CAN REJECT THE DISSIDENT GROUP AND ITS
NOMINEES BY SIGNING, DATING AND MAILING THE ENCLOSED WHITE PROXY CARD TODAY. WE
STRONGLY URGE YOU NOT TO SIGN ANY BLUE PROXY CARD SENT TO YOU BY THE DISSIDENT
GROUP.

   We sincerely appreciate your thoughtful attention to these important issues.

                                         Very truly yours,


                                         /s/ Robert A. Garvey
                                         ROBERT A. GARVEY
                                         Chairman and Chief Executive Officer


                                   IMPORTANT

    VOTE FOR A BOARD OF DIRECTORS THAT IS COMMITTED TO BUILDING THE VALUE OF
                     BIRMINGHAM STEEL FOR ALL STOCKHOLDERS!

            WE STRONGLY URGE YOU TO VOTE FOR THE COMPANY'S BOARD OF
                DIRECTORS BY SIGNING, DATING AND RETURNING THE
                        ENCLOSED WHITE PROXY CARD TODAY!

   If you have any questions or need assistance in voting your shares, please
call:

                           Innisfree M&A Incorporated
                         501 Madison Avenue, 20th Floor
                            New York, New York 10022

                         Call Toll-Free: (888) 750-5834
                  Banks and Brokers call collect: (212) 750-5833