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September 9, 2005

Mr. Ernest Greene

Division of Corporation Finance

U. S. Securities and Exchange Commission

Washington, D.C. 20549-0510

Re:	August 9, 2005 Comment Letter

LSB Industries, Inc.

Form 10-K for the fiscal year ended December 31, 2004

Form 10-Q for the period ended March 31, 2005

File No. 1-07677

Dear Mr. Greene:

This letter responds to your comment letter dated August 9, 2005, as referenced above.  We have repeated your comments and provided our response immediately under the heading "Company response:" or in a referenced attachment to this letter.

We appreciate your consideration of our extension requests.

Sincerely,

Tony M. Shelby

LSB Industries, Inc.

Executive Vice President of Finance

and Chief Financial Officer

FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2004

Comment applicable to your overall filing

1.  Where a comment below requests additional disclosures or other revisions to be made, please show us in your supplemental response what the revisions will look like. With the exception of the comments below that specifically request an amendment, all other revisions may be included in your future filings.

Company response:

The following responses have been prepared in accordance with this comment.

Item 9A - Controls and Procedures, page 44

2.	We have read your response to comment three from our letter dated May 25, 2005. Please amend your Form 10-K for the year ended December 31, 2004 to state in clear and unqualified language the conclusions reached by your chief executive officer and chief financial officer on the effectiveness of your disclosure controls and procedures as of December 31, 2004. You should not state that your disclosure controls and procedures are effective subject to certain conditions. See Question 5 of our Frequently Asked Questions on Management's Report on Internal Control Over Financial Reporting and Certification of Disclosure in Exchange Act Periodic Reports dated October 6, 2004.

Company response:

We intend to change our report on disclosure controls and procedures as follows:

We believe that our disclosure controls and procedures (as defined in Rule 13A-15(e) of the Securities Exchange Act of 1934, as amended ["Exchange Act"]) are designed to ensure that information required to be disclosed in the periodic reports filed by us with the Securities and Exchange Commission (the "SEC") is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to our management.  Based on management's most recent evaluation, in which our Chief Executive Officer and Chief Financial Officer participated, completed as of the end of the period covered by this Annual Report on Form 10-K, our Chief Executive Officer and Chief Financial Officer believe that our disclosure controls and procedures are effective.

During our fourth fiscal quarter of 2004, there were no significant changes in our internal controls over financial reporting (as defined in Rule 13A-15(f) of the Exchange Act) that affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

As noted on the cover of this Form 10-K, we are not an "accelerated filer". As a
result, we are not required to, and do not provide in this Form 10-K, a report
of our management as to our internal controls over financial reporting. Due to
the definitions, certain areas contained within the disclosure controls and
procedures overlap with the definition of internal control over financial
reporting. We are in the process of documenting and testing our internal
controls over financial reporting to provide the basis for our report covering
our internal controls over financial reporting when we are required to issue the
report in a subsequent Form 10-K. In the course of this process, management has
identified certain areas requiring improvement, which we are addressing.
Management routinely reviews potential internal control over financial reporting
issues with our Audit Committee.

Financial Statements

Statements of Income. page F-5

  3.  We have read your response to comment seven from our letter dated May 25, 2005. You have agreed to disclose the components and related amounts included in other income (expense) in a note to the financial statements in future filings. Please show us what this disclosure will look like for the fiscal years ended December 31, 2004, December 31, 2003 and December 31, 2002 and for the three months ended March 31, 2005.

Company response:

  Please see below

Note: Other Income (Expense): Other income and other expense consist of the following:

Year ended December 31

Three Months Ended

2004

2003

2002

March 31, 2005

    (In thousands)

Other Income

  Gains on sale of certain current assets,

   primarily precious metals

$

2,334

$

502

$

266

$

220

  Gains on the sale of property and

  equipment, net

340

-

47

422

  Insurance recoveries in excess of losses

  incurred

-

-

1,524

-

  Proceeds from certain key individual life

  insurance policies in excess of benefit

  obligations

-

-

-

1,138

  Benefit from the termination of firm

  purchase commitments

-

-

290

-

  Equity in earnings in affiliate

668

19

40

182

  Rental income

128

228

244

59

  Other

465

1,066

1,475

85

     Total Other Income

$

3,935

$

1,815

$

3,886

$

2,106

Other Expense

  Impairments of long-lived assets

$

(737

)

$

(500

)

$

-

$

(75)

  Other

(533

)

(590

)

(563

)

(163

)

     Total Other Expense

$

(1,270

)

$

(1,090

)

$

(563

)

$

(238

)

  "Editorial Note" -In preparing the above table, the Company reviewed
  an analysis of all transactions occurring in the appropriate time frame.
  The aggregate amount for "Other" under "Other income" in the above table includes the effects of numerous unrelated transactions
  none of which exceeds $240,000. Note, the above does not reflect changes that may result for implementation of comments in the May 25, August 9, or subsequent comment letters.

Statement of Cash Flows. page F-7

  4.  We have read your response to comment 10 from our letter dated May 25, 2005. It remains unclear how you determined it was appropriate to exclude the $2.1 million gain from operating income. Please tell us how you accounted for the purchase of the chemical plant and related assets, which include the precious metals. Please tell us the business purpose for the purchase of the chemical plant and precious metals as well as whether these metals were intended to be used in your operations. Also, please tell us whether the cash flows related to the sale of the assets of the chemical plant are reflected as cash flows from operating, investing, or financing activities; explain how your presentation complies with SFAS 95.

Company response:

In December 2003, the Company was the successful bidder at an auction of certain assets of an idle chemical plant. Included in the assets acquired were a nitric acid plant, equipment, catalysts (precious metals) and inventory. The purchase did not include the underlying land and thus no remediation costs are associated with the assets acquired.  These assets were acquired for the sole reason that the Company believed that they could sell the salable assets for a gain and salvage the remainder.  The Company allocated the entire purchase price to the current assets acquired with no basis in the long-lived assets of the nitric acid plant.  In January 2004, the Company performed an acid wash of the plant to recover any precious metals that existed in the piping at the plant, the sale of which resulted in a gain of $1.9 million of the $2.1 million gain. Some of the assets of the plant were destroyed through the process of recovering the precious metals.  The remaining assets were assigned to a third party in exchange for the obligation
for removal of the assets resulting in no gain or loss.  The Company never intended to operate the plant nor did they ever operate the plant.

The Company's decision to exclude the gain from Operating Income was due to the following reasons:

    The acquisition of the assets was not entered into in the normal course of operations.

    The assets were not intended to be nor were they placed in operation at the Company.

    This type of transaction is not part of the Company's core business.

    The allocation of the purchase price was made to the inventory and precious metals acquired which were not considered to be long-lived assets so the provisions of paragraph 45 of SFAS 144 did not apply.

    The remaining assets of the nitric acid plant after the recovery process were scrapped to a third party in exchange for the obligation removal of the assets.

Because of these reasons, the Company felt that including the gain in Operating Income added a sense of permanence to the transaction that could possibly be misleading to the reader of the Company's financial statements.

The gain, by virtue of the fact that it was a component of net income, was included in cash flows from operations in the Statement of Cash Flows.  We believe this classification complies with SFAS 95, primarily due to our belief that the transaction is neither an investing or financing transaction therefore, it is reportable as operating cash flow.  Paragraph 21 of SFAS 95 states:

"Operating activities include all transactions and other events that are not
defined as investing or financing activities in paragraphs 15-20......... Cash flows
from operating activities are generally the cash effects of transactions and
other events that enter into the determination of net income."

Paragraph 15 of SFAS 95 defines investing activities as

"acquiring.........property, plant and equipment and other productive assets...assets held for or used in the production of goods or services by the enterprise...."

The Company does not believe the transaction was an investing transaction because the assets acquired were not intended to be held for or used in a production process.

The Company does not believe the transaction was a financing transaction.

5.   Please amend your Form 10-K to provide revised financial statements, which include the gain of $340,000 in operating income as required by paragraph 45 of SFAS 144.

Company response:

We respectfully request that the Company be
allowed to revise our reporting on a prospective basis. We are prepared to make
the requested change in an amended Form 10K, if the Staff declines this request.
However, we continue to believe the amount not to be material. In our response
to comment 10, we discuss our approach to the determination of materiality as it
applies to the Company's consolidated financial statements. Additionally, the
Staff has requested in comment 7 that we amend our 2004 Form 10K to reclassify
$737,000 in provisions for impairment as a reduction of operating income. If we reclassify the
$340,000 gain along with  the $737,000 provision for impairment, the net
reclassification to operating income would be $397,000, we continue to believe
these amounts are not material for the reasons stated in our response to comment
10 and also due to net income being unchanged as a result of the requested
revision.

6.  We have read your response to comment 11 from our letter dated May 25, 2005. We remind you that paragraph 13 states that items that qualify for net reporting because their turnover is quick, their amounts are large, and their maturities are short, are cash receipts and payments pertaining to (a) investments (other than cash equivalents), (b) loans receivable, and (c) debt, providing that the original maturity of the asset or liability is three months or less. Please tell us the original maturity date of your revolving debt facilities and drafts payable. If the original maturities of your revolving debt facilities and drafts payable exceed three months, please present the gross changes on your statements of cash flows.

Company response:

The Company will comply prospectively, if necessary, however, the Company respectfully requests that the Staff reconsider its position with regard to asset-based revolving credit facilities. SFAS
95 discusses those situations where reporting of the net change is acceptable because knowledge of the gross cash receipts and payments (for the debtor under an asset-based revolving credit facility, payments and borrowings) may not be necessary to understand the enterprise's ..........financing activities. SFAS 95 discussions are aimed at financial institutions, however, such discussions do not rule out the application of the theory to other situations.  Under our revolving credit agreement, which we believe to be representative of asset-based lending agreements, we assign all receivables to the lender as collateral for the line of credit. To the extent collections match requirements the net effect on the balance sheet is $0, but, under the Staff's directive, the effect on the Statement of Cash Flows will be to disclose hundreds of millions of dollars of increases and decreases in revolving credit balances.  We continue to believe that the most informative information for the investor or the user of the Company's financials statements is the net change in the outstanding debt, not the total collections on accounts receivables and borrowings to replace those collections in the Company's treasury.

7.  We have read your response to comment 12 from our letter dated May 25, 2005. Given the $737,000 reflects approximately 21 % of your operating income for the year ended December 31, 2004, it is not clear how you determined this amount is not material. Please amend your Form 10-K to provide revised financial statements, which include the impairment of $737,000 in operating income as required by paragraph 25 of SFAS 144.

Company response:

We respectfully request that the Company be allowed to revise our reporting on a prospective basis.  We are prepared to
make the requested change in an amended Form 10K, if the Staff declines this request.  However, we continue to believe the amount not to be material as discussed in our response to comment 5
and also due to net income being unchanged as a result of the requested revision.

Note 2 - Summary of Significant Accounting Policies. page F-9

8.  We have read your response to comment 13 from our letter dated May 25, 2005. Please disclose the types of expenses that you include in the cost of sales line item and the types of expenses that you include in the selling, general and administrative expenses line item as you have mentioned in your response.

Company response:

The Company will disclose the following in our
prospective filings:

Cost of sales includes materials, labor and overhead costs to manufacture the products sold plus inbound freight, purchasing and receiving costs, inspection costs, internal transfer costs and warehousing costs excluding certain handling costs directly related to loading product being shipped to customers in our Chemical Business.

Selling, general and administrative costs include costs associated with the sales, marketing and administrative functions. Such costs include personnel costs, including benefits, advertising costs, commissions expenses, office and occupancy costs associated with the sales, marketing and administrative functions. Selling, general and administrative costs also include outbound freight in our Climate Control Business and certain handling costs directly related to product being shipped to customers in our Chemical Business.  These handling costs primarily consist of personnel costs for loading product into transportation equipment, rent and maintenance costs related to the transportation equipment, and certain indirect costs.

9. We note your response to prior comment 14. In your notes to the financial statements, please provide the disclosures r