1
===============================================================================

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED MAY 31, 1996

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934

COMMISSION FILE NUMBER 1-9944

CHAPARRAL STEEL COMPANY
(Exact name of registrant as specified in its charter)

DELAWARE 75-1424624
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

300 WARD ROAD, MIDLOTHIAN, TEXAS 76065
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: A/C 214 775-8241
Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE ON
TITLE OF EACH CLASS WHICH REGISTERED
------------------- ----------------

COMMON STOCK, PAR VALUE $.10 NEW YORK STOCK EXCHANGE

Securities registered pursuant to Section 12(g) of the Act:

NONE

Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter periods that the
Registrant was required to file such reports) and (2) has been subject to such
filing requirements for the past 90 days. Yes x No
--- ---

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K (Section 229.405 of this chapter) is not contained
herein, and will not be contained, to the best of registrant's knowledge, in
definitive proxy or information statements incorporated by reference in Part III
of this Form 10-K or any amendment to this Form 10-K. [x].

Aggregate market value of the voting stock (which consists solely of
shares of Common Stock) held by non-affiliates of the registrant as of August 9,
1996, computed by reference to the closing sale price of the registrant's Common
Stock on the New York Stock Exchange on such date: $55,568,325.

Indicate the number of shares outstanding of each of the Registrant's
classes of Common Stock, as of the latest practicable date.

COMMON STOCK - $.10 PAR VALUE
28,358,300 SHARES AS OF AUGUST 9, 1996

DOCUMENTS INCORPORATED BY REFERENCE

PORTIONS OF THE REGISTRANT'S ANNUAL REPORT TO STOCKHOLDERS FOR THE YEAR
ENDED MAY 31, 1996 ARE INCORPORATED BY REFERENCE INTO PART II.

PORTIONS OF THE REGISTRANT'S DEFINITIVE PROXY STATEMENT FOR THE ANNUAL
MEETING OF STOCKHOLDERS TO BE HELD OCTOBER 16, 1996, ARE INCORPORATED BY
REFERENCE INTO PART III.

(Page 1 of 19 pages including Exhibits)

===============================================================================
2
TABLE OF CONTENTS

PAGE

PART I

Item 1. Business................................................ 1

Item 2. Properties.............................................. 5

Item 3. Legal Proceedings....................................... 5

Item 4. Submission of Matters to a Vote of
Security Holders................................... 5

PART II

Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters........................ 5

Item 6. Selected Financial Data................................. 6

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................ 6

Item 8. Financial Statements and Supplementary Data............. 6

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................ 6

PART III

Item 10. Directors and Executive Officers of the Registrant...... 7

Item 11. Executive Compensation.................................. 9

Item 12. Security Ownership of Certain Beneficial Owners
and Management..................................... 9

Item 13. Certain Relationships and Related Transactions.......... 9

PART IV

Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K................................ 10

3
PART I

ITEM 1. BUSINESS

(a) General development of business

Chaparral Steel Company (the "Company") was organized as a Delaware
corporation in July 1973 by Texas Industries, Inc. ("TXI") and Co-Steel
Inc.("Co-Steel"), a Canadian corporation, which owns steel mills in New Jersey,
Canada and the United Kingdom. TXI is a New York Stock Exchange listed company
which produces cement and concrete. At the time of the Company's organization,
TXI and Co-Steel each owned a 50% interest in the Company. TXI owned 100% of the
Company from November 1985 when it acquired the remaining 50% of the outstanding
securities of the Company from Co-Steel, until July 1988 when approximately
19.8% of the outstanding securities were sold in an initial public offering of
common stock by the Company. The consolidated financial statements include the
operations of Chaparral Steel Company, America Steel Transport and Castelite
Steel Products, Inc.

(b) Financial information about industry segments

The Company operates in the steel industry only; therefore, no industry
segment information is presented.

The Company's original steel mill facility was completed in 1975 and
consisted of an electric arc furnace and a rolling mill, which produced rebar
used in concrete construction, and small size angles, channels, rounds and
flats.

In 1982, a major expansion of the steel mill, at a cost of
approximately $180 million, added an additional electric arc furnace and rolling
mill to produce medium-sized structural products. The expansion enabled the
Company to produce beams up to 8" wide. Additional modifications to the medium
section mill now enable the Company to produce beams up to 14" wide, in addition
to large channels and angles.

During fiscal 1992, commissioning was completed on a large beam mill
which has expanded the existing product range up to include 24" wide-flange
beams. The expansion was financed with long-term senior unsecured notes of $80
million.

PRODUCTS

The Company's products are sold generally to steel service centers and
steel fabricators for use in the construction industry, as well as to cold
finishers, forgers and original equipment manufacturers for use in the railroad,
defense, automotive, mobile home and energy industries.

The Company designed its bar and structural mills to efficiently
produce bar mill products (28% of 1996 sales on a tonnage basis), structural
mill products (46% of 1996 sales on a tonnage basis) and large beam mill
products (26% of 1996 sales on a tonnage basis). The bar and structural mills
can be modified, without substantial cost or delay, to change current product
mix in order to comply with customer needs or changes in market conditions.

1
4
After inspection, bundling and strapping, finished products are
delivered by common carrier, customer-owned truck, rail or barge. The Company
maintains an inventory of finished products based on anticipated short-term
usage to provide prompt shipments to customers when possible.

The following is a general description of the Company's products:

STRUCTURAL PRODUCT BUSINESS UNIT:

BEAMS

Beams are used for building construction and the non-building
fabrication industries. Sales of beams currently constitute approximately 71% of
the Company's sales on a tonnage basis. Beams produced by the Company's medium
section mill include wide-flange beams (ranging in size from 4" x 4" to 14" x
6-3/4"), certain sizes of standard "I" beams and Bantam(TM) beams. Those beams
are used in low-rise construction (up to five stories) and in various
fabrication operations for industrial machinery and mobile home frames. The
large beam mill has enabled the Company to produce wide-flange beams from 8" to
24" in diameter that are used in multi-story buildings, short-span bridges and
other heavy industrial applications.

The Company's products are predominately marketed in North America
exclusively by Company salespersons. Approximately 50% of the Company's products
are sold in Texas, Oklahoma, Louisiana and Arkansas. Other regional sales of the
Company's products are approximately 15% in the midwest United States and
approximately 13% in the southeastern United States. Rebar, merchant shapes and
other products are sold principally to customers located in the southwestern
United States. The Free Trade Agreements between the United States, Canada and
Mexico may continue to favorably affect the Company's position as a supplier of
certain steel products in the Canadian and Mexican markets. Export sales
accounted for 4% of 1996 shipments.

BAR PRODUCT BUSINESS UNIT:

REINFORCING BAR

The Company produces all commercial sizes of rebar from 3/8" diameter
to 1-3/8" diameter for use in construction applications ranging from highway and
public works projects to residential and high-rise construction.

MERCHANT QUALITY ROUNDS

Merchant quality rounds are cylindrical steel bars used in construction
and fabrication operations. Common uses include roof joists, anchor bolts and
truss supports.

SPECIAL BAR QUALITY ROUNDS

Special Bar Quality ("SBQ") rounds are produced in a large variety of
carbon and alloy grades primarily for use in the forging, machining and cold
drawing industries for production of automotive gears and hand tools. SBQ rounds
are also used as sucker rod material in the oil industry.

STRUCTURAL MERCHANT SHAPES AND OTHER PRODUCTS

These products consist of structural channels, flat bars and squares
used in the equipment manufacturing and construction industries, particularly in
low-rise structures.

2
5
EXPANDING CAPACITY

Historically, the Company's philosophy was to operate its mill at full
production capacity. Recently, the Company refocused on serving customer
requirements and specific markets while striving to achieve the lowest possible
unit cost of production. The Company's strategy is to continually increase its
melting capacity through productivity improvements, the utilization of new
technology and capital expenditures. Continuing increases in melting capacity
have dictated further capital spending for increases in rolling capacity to
allow maximum use of the Company's facilities to take advantage of marketplace
opportunities.

RAW MATERIALS AND ENERGY

The Company's primary raw material is scrap steel, which includes
shredded steel. The Company produces a major portion of its shredded steel
requirements from its own shredder operation at the site of the steel mill.
Shredded material, which constitutes approximately 41% of the Company's raw
material mix, is produced by the Company at its facility and is primarily
composed of crushed auto bodies purchased on the open market. Another grade of
scrap steel is #1 Heavy, which constitutes approximately 25% of the Company's
scrap steel requirements and is also purchased on the open market. Historically,
the Company has had an adequate supply of scrap steel for its operations, and
the Company believes that the supply of scrap steel will be adequate to meet
future requirements. The purchase price of scrap steel is subject to market
forces largely beyond the control of the Company. The Company has historically
maintained a scrap inventory commensurate with market conditions.

The Company's steel mill consumes large amounts of electricity and
natural gas. Electricity is obtained from a local electric utility under an
interruptible supply contract with price adjustments which reflect increases or
decreases in the utility's fuel costs. The Company believes that the savings in
the cost of electricity resulting from the interruption provisions of the
contract offsets any loss which might result from interruptions. Natural gas is
purchased in the open market generally under a one year supply contract. The
Company believes that adequate supplies of both electricity and natural gas are
readily available.

SEASONALITY

While there is generally no seasonality in demand for the Company's
products, production at the mill is normally shut down for up to two weeks each
summer and up to one week in December, in order to conduct comprehensive
maintenance (in addition to normal maintenance performed throughout the year)
and to install capital improvements. During these periods, much of the equipment
in the plant is dismantled, inspected and overhauled. The resulting lower
production during the three month periods ending August and February affect the
Company's financial results for those periods.

MARKETING AND BACKLOG

At present, the Company has approximately 1,700 customers. One customer
accounted for 11% of the Company's sales in 1996. The commodity nature of
certain of the Company's products is generally not characteristic of a long lead
time order cycle. The Company does not believe that backlog is a significant
factor in its business. While the Company has a small number of long-term
customer contracts, most contracts are for quarterly customer requirements or
for immediate shipment. Orders are generally filled within 45 days and are
cancelable.

3
6
COMPETITION AND OTHER MARKET FACTORS

The Company competes with steel producers, including foreign producers,
on the basis of price, quality and service. Intense sales competition exists for
substantially all of the Company's products. A substantial portion of the
Company's products is sold to the construction industry.

Both the domestic and foreign steel industries are characterized by
excess mill capacity. Steel producers in the United States have faced strong
competition from producers around the world. The Company believes that its
success in increasing productivity, reducing production costs and shifting into
higher margin product lines should continue to enable it to compete effectively
with both foreign and domestic producers.

ENVIRONMENTAL MATTERS

The operations of the Company and its subsidiaries are subject to
various federal and state environmental laws and regulations. Under these laws
the U.S. Environmental Protection Agency ("EPA") and agencies of state
government have the authority to promulgate regulations which could result in
substantial expenditures for pollution control and solid waste treatment. Three
major areas regulated by these authorities are air quality, water quality and
hazardous waste management. Pursuant to these laws and regulations emission
sources at the Company's facilities are regulated by a combination of permit
limitations and emission standards of statewide application, and the Company
believes that it is in substantial compliance with its permit limitations and
applicable laws and regulations.

The Company's steel mill generates, in the same manner as other similar
steel mills in the industry, electric arc furnace ("EAF") dust that contains
lead, chromium and cadmium. The EPA has listed this EAF dust, which is collected
in baghouses, as a hazardous waste. The Company has contracts with reclamation
facilities in the United States and Mexico pursuant to which such facilities
receive the EAF dust generated by the Company and recover the metals from the
dust for reuse, thus rendering the dust non-hazardous. In addition, the Company
is continually investigating alternative reclamation technologies and has
implemented processes for diminishing the amount of EAF dust generated.

In March 1991, the EPA issued an Administrative Order for Removal
Action requiring the Company, along with several other companies, to undertake
final removal activities (the "Final Activities") at a site to which it had
shipped EAF dust. The Company had participated earlier in preliminary remedial
activities at the site under an Administrative Order on Consent entered into in
January 1986 among the EPA, Chaparral and the other companies. Chaparral's share
of the costs associated with the Final Activities did not have a material
adverse effect on its competitive position, operations or financial condition.

The Company intends to comply with all legal requirements regarding the
environment, but since many of them are not fixed, presently determinable, or
are likely to be affected by future legislation or rule making by government
agencies, it is not possible to accurately predict the aggregate future costs of
compliance and their effect on the Company's operations, future net income or
financial condition.

4
7
EMPLOYEES

At May 31, 1996, the Company had 1,183 employees.

ITEM 2. PROPERTIES

The Company's original steel mill facility completed in 1975 in
Midlothian, Texas, consisted of an electric arc furnace and a rolling mill. In
1982, a major expansion of the steel mill, added an additional electric arc
furnace and rolling mill that produced medium-sized structural products. In
1992, a large beam mill was commissioned that results in excess rolling capacity
over the production capacity of the melting operation. The Company's real
property, plant and equipment are subject to liens securing its long-term debt.

Operating facilities are as follows:

(000's)
(000's) Production Approximate
Capacity 1996 square footage
(Tons) (Tons) of facilities
-------- ---------- --------------

Melting 1,600 1,611 265,000
Rolling 1,900 1,550 560,000

ITEM 3. LEGAL PROCEEDINGS

From time to time, the Company is involved in litigation relating to
claims arising in the ordinary course of business operations. No material
litigation is pending against or currently affects the Company.

The Company maintains insurance with financially sound insurance
companies against certain risks, which insurance the Company believes to be
adequate in relation to the Company's business. The Company also maintains a
hazardous waste liability policy against certain third party claims.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None

PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS

Common stock market prices, dividends and certain other items as shown
in the "Quarterly Stock Prices and Dividends" information located on page 15 of
the Registrant's Annual Report to Stockholders for the year ended May 31, 1996,
are incorporated herein by reference. The restriction on the payment of
dividends described in Note E to the Consolidated Financial Statements entitled
"Long-Term Debt" on page 11 and 12 of the Registrant's Annual Report to
Stockholders for the year ended May 31, 1996, is incorporated herein by
reference.

5
8
ITEM 6. SELECTED FINANCIAL DATA

The "Selected Financial Data" on page five of the Registrant's Annual
Report to Stockholders for the year ended May 31, 1996, is incorporated herein
by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

The "Management's Discussion and Analysis of Financial Condition and
Results of Operations" on pages three and four of the Registrant's Annual Report
to Stockholders for the year ended May 31, 1996, are incorporated herein by
reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The following Consolidated Financial Statements and Supplementary Data
of the Registrant and its subsidiaries, included in the Registrant's Annual
Report to Stockholders for the year ended May 31, 1996, are incorporated herein
by reference:

Consolidated Balance Sheets - May 31, 1996 and 1995 Consolidated
Statements of Income - Years ended May 31, 1996,
1995 and 1994
Consolidated Statements of Cash Flows - Years ended May 31, 1996, 1995
and 1994
Consolidated Statements of Stockholders' Equity - Years ended May 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements - May 31, 1996
Quarterly Financial Information

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING
AND FINANCIAL DISCLOSURE

None

6
9
PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Reference is made to "Election of Directors" on page two of the
Registrant's Proxy Statement for the Annual Meeting of Stockholders to be held
October 16, 1996. Information on the directors and executive officers of the
Registrant is presented below:

POSITIONS WITH REGISTRANT, OTHER
NAME AGE EMPLOYMENT DURING LAST FIVE YEARS
---- --- ---------------------------------

Robert D. Rogers........ 60 Chairman of the Board of the Company; President, Chief
Executive Officer and Director of TXI; Director of
Consolidated Freightways, Inc. (2)(3)

Gordon E. Forward....... 60 President, Chief Executive Officer and Director;
Director of TXI (2)

Kenneth R. Allen........ 39 Director of Investor Relations of Chaparral Steel and
TXI; Treasurer of TXI

Dennis E. Beach......... 57 Vice President - Administration

Larry L. Clark.......... 52 October 1993 to present, Vice President - Controller
and Assistant Treasurer; 1976 to September 1993,
Controller and Assistant Treasurer

David A. Fournie........ 48 October 1995 to present, Vice President - Structural
Products Business Unit; 1992 to October 1995, Vice
President of Operations; 1990 to 1991, General Manager
- Medium Section Mill

Richard M. Fowler....... 53 Vice President - Finance and Treasurer; Vice
President - Finance of TXI

H. Duff Hunt, III....... 50 October 1995 to present, Vice President - Recycled
Products Business Unit; 1993 to October 1995, General
Manager Operations - Melt Shop; 1992 to 1993, General
Manager - Engineering; 1990 to 1992, General Manager
Operations - Melt Shop

Richard T. Jaffre....... 53 Vice President - Raw Materials / Transportation

Robert C. Moore......... 62 Vice President - General Counsel and Secretary; Vice
President - General Counsel and Secretary of TXI

7
10

Libor F. Rostik......... 62 Vice President - Engineering

Peter H. Wright......... 54 October 1995 to present, Vice President - Bar Products
Business Unit; 1991 to October 1995, Vice President -
Quality Control and SBQ Sales

Robert Alpert........... 64 Director; Director of TXI and Consolidated
Freightways, Inc.; Chairman of the Board of Alpert
Companies (1)(3)

John M. Belk............ 76 Director; Chairman of the Board of Belk Stores
Services, Inc.; Director of Lowe's Companies, Inc. and
Coca-Cola Bottling Co. Consolidated (3)

Gerald R. Heffernan..... 76 Director; President - G. R. Heffernan & Associates,
Ltd.

Eugenio Clariond Reyes.. 53 October 1993 to present, Director; Director General
and Chief Executive Officer, Grupo IMSA S. A.;
President, Mexico - U.S. Chamber of Commerce;
Director, Instituto Tecnologico y de Estudias
Superiores de Monterrey, A.C.(1)

(1) Member of the Audit Committee.

(2) Member of the Executive Committee.

(3) Member of the Compensation Committee.

Directors who are not employees of the Company currently receive
$15,000 per year plus $1,000 for each day that a Board and/or a Committee
Meeting is attended. All references to years in the above biographies are
references to calendar years.

8
11
ITEM 11. EXECUTIVE COMPENSATION

The "Executive Compensation" and "Report of the Compensation Committee
on Executive Compensation" on pages five through nine of the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held October 16, 1996, is
incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The "Security Ownership of Certain Beneficial Owners" on page two and
the "Security Ownership of Management" on page four of the Registrant's Proxy
Statement for the Annual Meeting of Stockholders to be held October 16, 1996, is
incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

No reportable transactions occurred between the Company and any
director, nominee for director, officer or any affiliate of, or person related
to, any of the foregoing since the beginning of the Company's last fiscal year
(June 1, 1995).

9
12
PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON
FORM 8-K

(a)(1) and (2) The response to this portion of Item 14 is submitted as
a separate section of this report.

(a)(3) Listing of Exhibits

3. Articles of Incorporation. (incorporated by reference from
Chaparral Steel Company's Form S-1 Registration No. 33-22103
as filed June 29, 1988)

4. Instruments defining rights of security holders.
(incorporated by reference from Chaparral Steel Company's
Form S-1 Registration No. 33-22103 as filed June 29, 1988)

10. Material contracts. (incorporated by reference from
Chaparral Steel Company's Form S-1 Registration No. 33-22103
as filed June 29, 1988)

11. Statement re: computation of per share earnings.

13. Annual report to security holders--Registrant's annual report
to security holders for its last fiscal year, except for those
portions thereof which are expressly incorporated by reference
in this filing, is furnished for the information of the
Commission and is not to be deemed "filed" as part of this
filing.

21. Subsidiaries of the Registrant.

23. Consents of experts and counsel.

24. Power of Attorney for certain members of the Board of
Directors.

(b) Reports on Form 8-K

No reports on Form 8-K were filed during the quarter ended May
31, 1996.

(d) Financial Statement Schedules -- The response to this
portion of Item 14 is submitted as a separate section of this report.

10
13
SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the issuer has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Dallas,
State of Texas, on the 23rd day of August, 1996.

CHAPARRAL STEEL COMPANY

By: /s/GORDON E. FORWARD
--------------------
(Gordon E. Forward)
President, Chief
Executive Officer
and Director

Pursuant to the requirements of the Securities Act of 1934, this report
has been signed by the following persons on behalf of the Registrant in the
capacities and on the dates indicated.

Signatures Title Date
---------- ----- ----

/s/ROBERT D. ROGERS* Chairman of the Board August 23, 1996
--------------------
(Robert D. Rogers)

/s/GORDON E. FORWARD President, August 23, 1996
-------------------- Chief Executive Officer
(Gordon E. Forward) and Director

/s/RICHARD M. FOWLER Vice President - August 23, 1996
-------------------- Finance and Treasurer
(Richard M. Fowler) Chief Financial and
Accounting Officer

Director August 23, 1996
--------------------
(Robert Alpert)

Director August 23, 1996
--------------------
(John M. Belk)

11
14

/s/GERALD R. HEFFERNAN* Director August 23, 1996
--------------------------
(Gerald R. Heffernan)

/s/EUGENIO CLARIOND REYES* Director August 23, 1996
--------------------------
(Eugenio Clariond Reyes)

*By /s/RICHARD M. FOWLER
--------------------------
(Richard M. Fowler)
Attorney-in-Fact

12
15

ANNUAL REPORT ON FORM 10-K

ITEM 14 (a)(1) AND (2), (c) AND (d)

LIST OF FINANCIAL STATEMENTS AND SCHEDULES

FINANCIAL STATEMENT SCHEDULES

CERTAIN EXHIBITS

YEAR ENDED MAY 31, 1996

CHAPARRAL STEEL COMPANY AND SUBSIDIARIES

MIDLOTHIAN, TEXAS

13
16
FORM 10-K

ITEM 14 (a)(1) and (2) and ITEM 14(d)

LIST OF FINANCIAL STATEMENTS AND SCHEDULES

The following consolidated financial statements of Chaparral Steel
Company included in the annual report of the Company to its stockholders for the
year ended May 31, 1996, are incorporated by reference in Item 8:

CHAPARRAL STEEL COMPANY AND SUBSIDIARIES

Consolidated Balance Sheets - May 31, 1996 and 1995
Consolidated Statements of Income - Years ended May 31, 1996, 1995 and
1994 Consolidated Statements of Cash Flows - Years ended May 31, 1996,
1995 and 1994
Consolidated Statements of Stockholders' Equity - Years ended May 31,
1996, 1995 and 1994
Notes to Consolidated Financial Statements - May 31, 1996

The following consolidated financial statement schedule for the years
ended May 31, 1996, 1995 and 1994 is submitted herewith:

Schedule II -- Valuation and qualifying accounts

All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions, or are inapplicable and therefore, have
been omitted.

14
17

CHAPARRAL STEEL COMPANY AND SUBSIDIARIES

SCHEDULE II -- VALUATION AND QUALIFYING ACCOUNTS

For the Years Ended May 31, 1996, 1995 and 1994

(In thousands)

Col. A Col. B Col. C Col. D Col. E
------ ------ ------ ------ ------

Additions
Balance at Charged to Balance at
Beginning Costs and End of
Description of Period Expenses Deductions Period
----------- ---------- ---------- ---------- ----------

1996:
Allowance for
doubtful accounts........ $2,468 $ 635 $ 255 (1) $2,848

1995:
Allowance for
doubtful accounts........ $3,848 $ 1,440 $ 2,820 (1) $2,468

1994:
Allowance for
doubtful accounts........ $3,425 $ 800 $ 377 (1) $3,848

(1) Uncollectible receivables written off.

15
18
INDEX TO EXHIBITS

EXHIBIT
NUMBER EXHIBIT
- ------ -------

11. Statement re: computation of per share earnings.

12. Annual report to security holders--Registrant's annual report to security
holders for its last fiscal year, except for those portions thereof which
are expressly incorporated by reference in this filing, is furnished for
the information of the Commission and is not to be deemed "filed" as part
of this filing. Since the financial statements in the report have been
incorporated by reference in this filing, the accountant's certificate is
manually signed in the signed copy of this filing.

21. Subsidiaries of the Registrant.

23. Consents of experts and counsel.

24. Power of Attorney for certain members of the Board of Directors.

27. Financial Data Schedule