Keystone Consolidated Industries, Inc.
                             7000 S.W. Adams Street
                                Peoria, IL 61641

David L. Cheek
President and Chief Executive Officer



                                 January 5, 2004


Dear Valued Customer:

We understand your number one concern is that Keystone  continues to provide you
with the  products  you  order on time  and  that we  continue  to meet the high
service standards to which you have grown accustomed.  The fact that a number of
our  competitors  have had to seek the  protections  of the court to continue to
operate,  and that some have not made it, adds to your worries about us. We know
that. Therefore,  we have been working very closely together with our employees,
suppliers,  and  lenders  to put in place  changes  to ensure we will be able to
continue to serve you as a trusted supplier now and in the future.

We are very  pleased to inform you that we have  reached a  tentative  agreement
with our largest labor union that will help us continue to be competitive in the
marketplace. This agreement is subject to vote by the entire bargaining unit and
we are cautiously  optimistic that we will get their support just as we have had
in the  past.  We  appreciate  their  sacrifices  and that of all of our  valued
employees and retirees who are making similar  sacrifices for the welfare of our
Company.

We are also in the process of  negotiating  to secure the  additional  financing
necessary to effect our plan to enhance our financial position,  which will also
bring  greater  stability  to our Company.  Work remains to be done,  but we are
making steady progress.

These are difficult times given the  unprecedented  increases in scrap prices as
well as energy and  health  care  costs.  We have taken  steps to  mitigate  the
impacts these increased costs will have on our Company going forward.

All of these  efforts  will put  Keystone in a position to be your most  trusted
supplier,  and we  intend  to live  up to your  expectations.  Thanks  for  your
continued  loyalty and we are confident we'll be there to repay that loyalty for
years to come.

Please call me directly at 309/697-7702 if you have any questions or concerns. I
would also like to take this opportunity to wish you a most prosperous 2004.

                                                Yours truly,



                                                David L. Cheek