SECURITIES AND EXCHANGE COMMISSION

                            WASHINGTON, D.C. 20549

                                  FORM 10-Q

(Mark One)

    [X]              QUARTERLY REPORT PURSUANT TO SECTION 13
                 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

                  For the quarterly period ended March 31, 1999

                                       OR

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

             For the transition period from __________ to __________

                         Commission file number 0-14061


                             STEEL TECHNOLOGIES INC.
                             -----------------------
             (Exact name of registrant as specified in its charter)

                        Kentucky                   61-0712014
            --------------------------------    -------------------
            (State or other jurisdiction of      (I.R.S. Employer
            incorporation or organization)       Identification No.)

               15415 Shelbyville Road, Louisville, KY     40245 
                --------------------------------------   --------
               (Address of principal executive offices) (Zip Code)

                                 (502) 245-2110
               --------------------------------------------------
              (Registrant's telephone number, including area code)


   (Former name, former address and former fiscal year, if changed since last
                                     report)

Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by  Sections  13 or 15(d)  of the  Securities  Exchange  Act of 1934
during the preceding 12 months (or for such shorter  period 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

There were 11,127,969 shares outstanding of the Registrant's  common stock as of
April 30, 1999.
                                   

                                       1
<PAGE>

                           STEEL TECHNOLOGIES INC.

                                    INDEX



                                                                     Page Number
PART I.   FINANCIAL INFORMATION

          Item 1.   Financial Statements

               Condensed Consolidated Balance Sheets March 31, 1999
               (Unaudited) and September 30, 1998(Audited) ....................3

               Condensed Consolidated  Statements of Income Three months
               and Six months ended March 31, 1999 and 1998 (Unaudited)........4

               Condensed Consolidated Statements of Cash Flows Six months 
               ended March 31, 1999 and 1998(Unaudited) ...................... 5

               Notes to Condensed Consolidated Financial Statements 
               (Unaudited) ..................................................6-7

          Item 2.   Management's Discussion and Analysis of Financial
               Condition and Results of Operations .........................8-10

          Item 3.   Quantitative and Qualitative Disclosures About 
               Market Risk....................................................11
              
PART II.  OTHER INFORMATION

          Item 6    Exhibits and Reports on Form 8-K..........................11

          SIGNATURE ..........................................................12

                                       2
<PAGE>
                                    

                        Part I. - FINANCIAL INFORMATION
                          Item 1. Financial Statements
<TABLE>
<CAPTION>
                            STEEL TECHNOLOGIES INC.
                     Condensed Consolidated Balance Sheets

(Amounts in thousands)                                  March 31   September 30
--------------------------------------------------------------------------------
                                                          1999         1998
                                                       (Unaudited)   (Audited)
                                                  ------------------------------

<S>                                                  <C>          <C> 
ASSETS
Current assets:
 Cash and cash equivalents .......................     $   3,257    $   4,778
   Trade accounts receivable, net ................        60,286       47,907
   Inventories ...................................        73,024       76,523
   Deferred income taxes .........................         1,665        1,621
   Prepaid expenses and other assets .............         1,042          748
                                                       ----------   ----------
       Total current assets .......................       139,274      131,577
                                                       ----------   ----------

Property, plant and equipment, net ...............       106,919      106,631

Investments in corporate joint ventures ..........        19,035       18,163

Goodwill, net of amortization ....................         9,348        9,060

Other assets .....................................         2,057        1,050
                                                       ---------    ---------
                                                       $ 276,633    $ 266,481
                                                       =========    =========
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ..............................     $  33,538    $  35,925
   Accrued liabilities ...........................         7,976        6,231
   Long-term debt due within one year ............         6,690        9,102
                                                       ---------    ---------
      Total current liabilities ..................        48,204       51,258

Long-term debt ...................................        97,345       88,300
Other liabilities ................................         1,139         --
Deferred income taxes ............................        13,904       13,247
                                                       ---------    ---------
     Total liabilities ...........................       160,592      152,805
                                                       ---------    ---------

Commitments and contingencies ....................          --           --

 Shareholders' equity:
   Preferred stock ...............................          --           --
   Common stock ..................................        17,018       16,928
   Treasury stock ................................        (7,067)      (3,792)
   Additional paid-in capital ....................         4,909        4,909
   Retained earnings .............................       103,382       97,071
   Foreign currency translation adjustment .......        (2,201)      (1,440)
                                                       ---------    --------- 
                                                         116,041      113,676
                                                       ---------     --------
                                                       $ 276,633    $ 266,481  
                                                       =========    =========  

The  accompanying  notes  are an  integral  part of the  condensed consolidated 
financial statements.
</TABLE>

                                       3
<PAGE>
                                     

                              STEEL TECHNOLOGIES INC.
                    Condensed Consolidated Statements of Income
<TABLE>
<CAPTION>

(Amounts in thousands,                   Three Months Ended    Six Months Ended
except per share data, unaudited)             March 31             March 31
--------------------------------------------------------------------------------
                                         1999       1998       1999       1998
                                     -------------------------------------------
<S>                                    <C>        <C>        <C>        <C>     
Sales ..............................   $106,891   $101,287   $205,093   $197,736
Cost of goods sold .................     92,366     89,179    177,615    175,230
                                       --------   --------   --------   --------
     Gross profit ..................     14,525     12,108     27,478     22,506

Selling, general and administrative
  expenses .........................      6,422      5,568     12,780     10,918
Equity in net income of 
unconsolidated corporate joint 
venture ............................        157        258        272        760
                                       --------   --------   --------   --------
   Operating income ................      8,260      6,798     14,970     12,348

Interest expense ...................      1,823      1,488      3,528      3,050
                                       --------   --------   --------   --------
   Income before income
     taxes .........................      6,437      5,310     11,442      9,298

Provision for income taxes .........      2,544      2,076      4,558      3,573
                                        -------   --------   --------   --------
   Net income ......................   $  3,893   $  3,234   $  6,884   $  5,725
                                       ========   ========   ========   ========
  
Diluted weighted average
  number of common shares
  outstanding ......................     11,248     12,050     11,344     12,048
                                       ========   ========   ========   ========
Diluted earnings per common
  share ............................   $   0.35   $   0.27   $   0.61   $   0.48
                                       ========   ========   ========   ========
Basic weighted average number
  of common shares outstanding .....     11,230     11,997     11,330     11,997
                                       =======    ========   ========   ========
Basic earnings per common
  share ............................   $   0.35   $   0.27   $   0.61   $   0.48
                                       ========   ========   ========   ========
Cash dividends per common
  share ............................   $   --     $   --     $   0.05   $   0.05
                                       =======    =======    ========   ========

The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.
</TABLE>
                                       4
<PAGE>

                             STEEL TECHNOLOGIES INC.
                 Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
                                                            Six months ended
(Amounts in thousands, unaudited)                               March 31
--------------------------------------------------------------------------------
                                                            1999          1998
                                                     ---------------------------
<S>                                                      <C>           <C>    
CASH FLOWS FROM OPERATING ACTIVITIES:
     Net Income .....................................     $  6,884      $  5,725
    Adjustments to reconcile net income to net
      cash provided by operating activities:
       Depreciation ................................        6,079         5,636
       Amortization ................................          178           121
       Deferred income taxes .......................          613           621
       Equity in net income of unconsolidated
         corporate joint venture....................         (272)         (760)
       Loss on sale of assets ......................           21             5
       Increase (decrease) in cash resulting
         from changes in:
             Trade accounts receivable .............      (11,513)       (7,951)
             Inventories ...........................        2,872         9,997
             Prepaids expenses and other assets ....       (2,181)        5,741
             Accounts payable ......................       (2,689)        2,270
             Accrued liabilities and income
                taxes ..............................        3,544           462
                                                         --------      --------
Net cash provided by operating activities ..........        3,536        21,867
                                                         --------      --------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment ......       (8,570)       (5,813)
   Proceeds from sale of property, plant and
     equipment......................................        1,357          --
   Investment in unconsolidated joint venture.......         (600)         --
                                                         --------      --------
Net cash used in investing activities ..............       (7,813)       (5,813)
                                                         --------      -------- 
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt ....................       15,000          --
   Principal payments on long-term debt ............       (8,368)       (9,547)
   Cash dividends on common stock ..................         (573)         (600)
   Repurchase of common stock ......................       (3,277)         (259)
   Net issuance of common stock under incentive
     stock option plans ............................           92             7
                                                         --------      --------
Net cash provided by (used in) financing activities         2,874       (10,399)
                                                         --------      -------- 
Effect of exchange rate changes on cash ............         (118)         (124)
                                                         --------      -------- 
Net (decrease) increase in cash and cash
  equivalents ......................................       (1,521)        5,531
Cash and cash equivalents, beginning of year .......        4,778         3,467
                                                         --------      --------
Cash and cash equivalents, end of period ...........     $  3,257      $  8,998
                                                         ========      ========
Supplemental Cash Flow Disclosures:

Cash payment for interest ..........................     $  4,904      $  3,231
                                                         ========      ========
Cash payment for income taxes ......................     $  2,041      $  2,043
                                                         ========      ========

The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.
</TABLE>

                                       5
<PAGE>
                                    
                          STEEL TECHNOLOGIES INC.
             NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                 (Unaudited)

1.  BASIS OF PRESENTATION:

The condensed  consolidated balance sheet as of March 31, 1999 and the condensed
consolidated  statements  of income for the three and six months ended March 31,
1999 and 1998,  and condensed  consolidated  cash flows for the six months ended
March 31, 1999 and 1998 have been prepared by the Company  without audit. In the
opinion of management,  all  adjustments  (which  include only normal  recurring
adjustments)  necessary to present  fairly the  financial  position,  results of
operations and cash flows at March, 1999 and for all periods presented have been
made.

Certain  information  and footnote  disclosures  normally  included in financial
statements prepared in accordance with generally accepted accounting  principles
have been condensed or omitted.  It is suggested that these condensed  financial
statements  be read in  conjunction  with the  financial  statements  and  notes
thereto  included in the Company's  annual report to  shareholders  for the year
ended  September 30, 1998.  The results of  operations  for the six months ended
March 31, 1999 are not necessarily  indicative of the operating  results for the
full year.

2.  INVENTORIES:
<TABLE>
<CAPTION>

Inventory consists of:
(Amounts in thousands)                                   March 31   September 30
--------------------------------------------------------------------------------
                                                           1999         1998
                                                       (Unaudited)    (Audited)
                                                   -----------------------------
<S>                                                       <C>            <C>    
Raw materials ....................................        $58,439      $66,033
Finished goods and work in process ...............         14,585       10,490
                                                          -------      -------
                                                          $73,024      $76,523
                                                          =======      =======
</TABLE>
3.  FOREIGN CURRENCY TRANSLATION:

The Mexican economy was considered  hyper-inflationary  for financial  reporting
until  January 1, 1999.  Accordingly,  the  Company  used  monetary/non-monetary
method of  accounting.  As of January 1, 1999, the Mexican  subsidiary  uses the
peso as the  functional  currency.  The Company  uses the current rate method of
translation and reports translation adjustments as part of comprehensive income.

                                  

                                       6
<PAGE>

4.  NET INCOME PER SHARE COMPUTATIONS:

The following is a  reconciliation  of the numerator and the  denominator of the
basic and diluted per share computations:
<TABLE>
<CAPTION>

                                            
(Amounts in thousands, except               Three Months Ended Six Months Ended
 per share data, unaudited)                     March 31             March 31
--------------------------------------------------------------------------------
                                             1999      1998      1999      1998
                                
<S>                                        <C>       <C>       <C>       <C>    
Net income .............................   $ 3,893   $ 3,234   $ 6,884   $ 5,725
                                           -------   -------   -------   -------
Shares (denominator) used for
  diluted per share computations:
    Weighted average shares of common
      stock outstanding.................    11,230    11,997    11,330    11,997
    Plus: dilutive effect of stock
      options ..........................        18        53        15        51
                                           -------   -------   -------   -------
           Dituted weighted average 
             shares ....................    11,248    12,050    11,345    12,048
                                           -------   -------   -------   -------
Shares (denominator) used for basic per
  share computations:
    Weighted average shares of common stock
      outstanding ......................    11,230    11,997    11,330    11,997

Net income per share data:
    Diluted ............................   $  0.35   $  0.27   $  0.61   $  0.48
                                           -------   -------   -------   -------
    Basic ..............................   $  0.35   $  0.27   $  0.61   $  0.48
                                           -------   -------   -------   -------
</TABLE>
Options to purchase  528,000 and 185,000  shares were  outstanding  at March 31,
1999,  and 1998,  respectively  and were  excluded  from the  calculation  above
because the exercise  prices on the options were greater than the average market
price of the Company's stock for the periods.

5.  COMPREHENSIVE INCOME:

Effective October 1, 1998, the Company adopted Statement of Financial Accounting
Standards  No. 130,  "Reporting  Comprehensive  Income"  issued by the Financial
Accounting Standards Board in June 1997.  Comprehensive income is defined as all
changes in equity  during the period  except those  resulting  from  shareholder
equity  contributions and distributions.  Comprehensive  income comprises of net
income  and  unrealized  gains and  losses  on  foreign  currency  translations.
Comprehensive income is summarized as follows:

<TABLE>
<CAPTION>

(Amounts in thousands, except per   Three Months Ended       Six Months Ended
 share data, unaudited)                  March 31                March 31
--------------------------------------------------------------------------------
                                     1999       1998        1999       1998
                                 -----------------------------------------------
<S>                               <C>        <C>         <C>        <C>     
Net income .....................  $  3,893   $  3,234    $  6,884   $  5,725
    Foreign currency translation
        adjustment .............       761         --         761         --
                                  --------   --------    --------   --------
    Comprehensive income .......  $  4,654   $  3,234    $  7,645   $  5,725
                                  ========   ========    ========   ========
</TABLE>

The  Company  does  not  provide  for U.S.  income  taxes  on  foreign  currency
translation   adjustments  because  it  does  not  provide  for  such  taxes  on
undistributed earnings of foreign subsidiaries
                                  

                                       7
<PAGE>

   Item 2. Management's Discussion and Analysis of Financial Condition and
                            Results of Operations

When used in the  following  discussion,  the word  "expects"  and other similar
expressions are intended to identify forward-looking statements,  which are made
pursuant to the safe harbor  provisions  of the  Private  Securities  Litigation
Reform Act of 1995. Such forward-looking statements are subject to certain risks
and  uncertainties  that could cause actual  results to differ  materially  from
those projected.  Specific risks and uncertainties  include, but are not limited
to, general business and economic conditions; cyclicality of demand in the steel
industry,  specifically in the automotive market; work stoppages;  risks of year
2000  noncompliance  or  other  business   interruptions   affecting  automotive
manufacturers;  competitive  factors such as pricing and  availability of steel;
reliance on key customers;  and potential  equipment  malfunctions.  Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date  hereof.  The  Company  undertakes  no  obligation  to
republish  revised  forward-looking  statements  to reflect  the  occurrence  of
unanticipated events or circumstances after the date hereof.

Results of Operations

Steel  Technologies  posted record second quarter sales of $106,891,000  for the
fiscal  quarter  ended  March  31,  1999,  an  increase  of  6%  from  sales  of
$101,287,000  for the second  quarter  ended March 31, 1998.  The Roberts  Steel
Company (now a wholly owned subsidiary of Steel  Technologies  Ohio) acquired on
July 1, 1998 added $6,145,000 of revenues for the second quarter of fiscal 1999.
Sales of existing Steel  Technologies steel processing  operations  decreased by
approximately $541,000 or 1% from a year ago.

Sales for the six months ended March 31, 1999  increased by 4%, to  $205,093,000
compared  to  $197,736,000  for the six  months  ended  March  31,  1998.  Steel
Technologies  Ohio contributed  $10,745,000 in revenues for the six months ended
March 31, 1999. Sales of existing Steel Technologies steel processing operations
decreased by  approximately  $3,388,000 or 2% from the previous year's first six
months.

     The Company  continues to focus  significant  resources  on the  automotive
industry and generates a major portion of business from selling to customers who
are manufacturing component parts to the automotive industry.

Tons  shipped in the second  quarter  and six  months of fiscal  1999  increased
approximately 14% and 11%,  respectively  compared to the second quarter and six
months of fiscal 1998.  Average  selling  prices of steel for the second quarter
and six months of fiscal 1999 decreased  approximately  8% and 6%,  respectively
from the previous  year.  The sales outlook is solid based on order activity and
backlogs.

The gross profit margin was 13.6% and 13.4% in the second quarter and six months
of fiscal 1999,  respectively  compared to 12.0% and 11.4% in the second quarter
and six months of fiscal 1998,  respectively.  The  improvements are primarily a
result of  customer  and  product  mix  improvements,  productivity  increases,
a reduction in raw  materials  prices and other  operating  cost  reductions.The
Company expects stable and, in some cases, a slight increase in the price of raw
materials,  especially in hot rolled steel. Strong demand for steel products and
reduction in the amount of foreign  steel  imports  have  resulted in firmer raw
material prices. As a result of trade suits initiated by U.S.  producers against
Japan,  Russia and Brazil,  the supply of steel from  foreign  producers  should
decline in 1999 as  compared  to 1998,  and most  likely will result in domestic
producers  increasing raw material prices.  Should raw material prices increase,
margins would be negatively impacted in the event that corresponding sales price
increases  are not passed on to  customers.  The  production  cost  efficiencies
associated  with  anticipated  higher  sales  volumes is expected to  positively
impact gross margins. Additionally, the Company's pickling facility and blanking
lines are  expected to  increase  the amount of higher  margin  toll  processing
revenue. Toll processing,  primarily of customer-owned  steel,  generates higher
gross margin percentages than the traditional processing of Company-owned steel.

Steel  Technologies  continues  to actively  manage the level at which  selling,
general  and  administrative  costs  are added to its cost  structure.  Selling,
general  and   administrative   costs  increased   approximately  15%  and  17%,
respectively  from the  comparable  second quarter and first half of fiscal 1998
period.  Selling,  general and administrative  expenses as a percentage of sales
were 6.0% for the second  quarter  of fiscal  1999 as  compared  to 5.5% for the
second quarter of fiscal 1998. Selling, general and administrative expenses as a
     percentage  of sales were 6.2% for the six  months  ended  March 31,  1999,
compared  to 5.5% for the six months  ended March 31,  1998.  The  increase  was
primarily  attributable  to the  additional  expenses from the addition of Steel
Technologies Ohio, and additional  marketing expenses to support sales growth of
Steel Technologies Carolinas and Mexico.

The  Company's  share  of the  income  of  Mi-Tech  Steel,  Inc.,  (Mi-Tech)  an
unconsolidated corporate joint venture, was $157,000 and $272,000,  respectively
for the second  quarter and six months of fiscal 1999  compared to $258,000  and
$760,000,  respectively  for the second  quarter and six months  ended March 31,
1998.  The slower  than  expected  start up of the  Decatur,  Alabama  operation
impacted Mi-Tech's  profitability for the second quarter and first six months of
fiscal 1999 as compared to the  comparable  periods of fiscal 1998.  The Company
expects similar income  contributions from Mi-Tech for the remaining quarters of
the current fiscal year.
                                       8
<PAGE>
     Interest  expense was  $1,823,000 and $3,528,000 for the second quarter and
six months of fiscal 1999 compared to $1,488,000  and  $3,050,000 for the second
quarter  and six months of fiscal  1998.  The  increase  is the result of higher
average  borrowings used to finance the acquisition of Roberts Steel Company and
the charges from an interest rate swap valuation.

The  Company's  effective  income  tax rate was  approximately  39.5% and 39.8%,
respectively  for the second  quarter and six months of fiscal 1999  compared to
39.2% and 38.4% for the  comparable  periods of fiscal  1998.  The  increase  is
attributable  to a lower  percentage of overall  earnings from the Mi-Tech joint
venture, which are not fully taxable to the Company.

Liquidity and Capital Resources

At March 31,  1999,  Steel  Technologies  had  $91,071,000  of working  capital,
maintained  a  current  ratio  of  2.9:1  and had  total  debt  at 47% of  total
capitalization.   The  Company  continues  to  manage  the  levels  of  accounts
receivable,  inventories  and other  working  capital  items in  relation to the
trends in sales and the overall market. For the first six months of fiscal 1999,
increased  profit  levels  contributed  to the  generation of $3,536,000 of cash
flows from  operations.  Cash  flows from  operations  and  available  borrowing
capabilities  are  expected  to meet the  needs of the  Company  throughout  the
balance of fiscal 1999.

     Capital  expenditures for the six months of fiscal 1999 totaled $8,570,000.
The major  expenditures  were for the  construction  of the new Berkeley,  South
Carolina  plant and the purchase of the building for the Ohio  operation.  Steel
Technologies  continues to expand production capacity and processing  facilities
to  serve  the  growing  needs  of  customers.  The  capital  additions  for all
facilities are expected to approximate $12,000,000 for fiscal 1999.

Steel Technologies maintains an equity investment of approximately $8,739,000 in
its  90%  owned  Mexican   subsidiary.   The  Mexican   economy  was  considered
hyper-inflationary  for financial reporting until January 1, 1999.  Accordingly,
the Company used the  monetary/non-monetary  method of accounting. As of January
1, 1999, the Mexican  subsidiary uses the peso as the functional  currency.  The
Company   started  using  the  current  rate  method  of  translating  the  peso
denominated  financial  information  in  U.S.  dollar  and  reports  translation
adjustments in comprehensive income. Due to the costs of hedging currency risks,
the Company has not entered into any hedging arrangements

Steel Technologies maintains an equity investment,  principally in the preferred
stock of Processing  Technology,  Inc., a corporate  joint venture.  The Company
periodically evaluates the possible conversion of the preferred stock investment
into common  stock of  Processing  Technology,  Inc. The decision to convert the
investment  to  common  stock  will be based  upon the joint  venture  attaining
certain financial criteria  established by Steel Technologies.  Upon conversion,
the Company  would be obligated to guarantee a  proportionate  share,  currently
approximating $8,700,000 of the joint venture's loan and lease commitments.  The
conversion is not expected to occur in the near term.

In December 1998, the Company  increased the limit on the unsecured bank line of
credit  from  $80,000,000  to  $100,000,000.  As of March  31,  1999,  there was
$64,000,000  outstanding on the credit facility. At this time the Company has no
known material obligations,  commitments or demands which must be met beyond the
next twelve  months  other than the  ten-year  private  placement  notes and the
unsecured  bank line of credit.  Any  additional  funds will be used for growth,
including strategic acquisitions,  investment in joint ventures, construction of
new plant  capacity,  and investment in production and processing  capabilities.
The form of such financing may vary  depending  upon the  prevailing  market and
related  conditions,  and may  include  short  or  long-term  borrowings  or the
issuance of debt or equity securities.

At March 31, 1999,  Steel  Technologies  had  $97,345,000 of debt long-term debt
outstanding.  Under  various  debt  agreements,  the Company  agrees to maintain
specified  levels of working capital and net worth,  maintain certain ratios and
limit the addition of substantial  debt.  The Company is in compliance  with all
loan  covenants,  and none of these  covenants  would restrict the completion of
currently planned capital expenditures.

During 1998,  Steel  Technologies  entered into a long-term  interest  rate swap
agreement to reduce the risk of interest rate  variability.  Under the contract,
the Company  agrees with  another  party to exchange  quarterly  the  difference
between  variable-rate and fixed-rate amounts calculated on a notional principal
amount of $30,000,000.

                                       9
<PAGE>

Pursuant  to a  joint  venture  agreement,  Steel  Technologies  has  guaranteed
$8,250,000 of the bank financing  required for the working  capital  purposes of
Mi-Tech. In October 1998, Steel Technologies  contributed  $600,000 in equity to
Mi-Tech  for  the  start-up  of  a  steel  processing  facility  in  San  Diego,
California.  Additional  equity  contributions  to the  joint  venture  are  not
expected for the  foreseeable  future,  but if required  would be financed  with
available funds from the Company's bank line of credit.

During  1998,  the  Board  of  Directors  approved  a  plan  under  which  Steel
Technologies may repurchase up to 1,500,000  shares of its common stock.  Shares
may be  purchased  from  time to  time  at  prevailing  prices  in  open  market
transactions,   subject   to   market   conditions,   share   price   and  other
considerations.   During  the  second   quarter  of  fiscal  1999,  the  Company
repurchased  159,000 shares of its common stock at prevailing  market prices. As
of March 31, 1999, the Company had repurchased a total of approximately  873,000
shares of common stock at prevailing market prices.

Steel Technologies believes all manufacturing  facilities are in compliance with
applicable  federal  and state  environmental  regulations.  The  Company is not
presently aware of any fact or circumstance, which would require the expenditure
of material amounts for environmental compliance.

Year 2000 Compliance

Steel Technologies' Year 2000 project (Project) addresses the issue of using two
digits,  rather  than four,  to define the  century.  Any  programs  with a time
sensitive  software may recognize a date using "00" as the year 1900 rather than
the year 2000, which could result in miscalculations or systems failures.

The  Project  focuses   primarily  in  the  following   areas:   infrastructure,
applications,   manufacturing,   third-party  suppliers  and  customers.   Steel
Technologies has contracted  Electronic Data Systems (EDS) to manage the Project
and make the necessary remediations.

The Project  addresses six phases:  inventorying of Year 2000 compliance  items;
assessing  priorities to identified  items;  determining  the materiality of the
Year 2000 compliance items;  repairing or replacing material items not Year 2000
compliant;  testing material items;  and  implementing  contingency and business
continuation plans for each Company location.

The infrastructure  section consists of hardware and systems software other than
application  software.  The Company  completed all of the testing,  remediating,
upgrading or replacing of hardware and systems software as of March 31, 1999.

The  application  software  section  includes both the conversion of application
software that is not Year 2000 compliant and, where applicable,  the replacement
of software.  As of March 31, 1999, all of the  application  software was tested
and remedied.

The manufacturing  section of the Project relates to the hardware,  software and
associated  embedded  computer  chips  that  are  used in the  operation  of all
facilities. The Company estimates that 10 percent of the manufacturing equipment
is  dependent  on date  sensitive  software  and that  all of the  manufacturing
equipment is Year 2000 compliant at March 31, 1999.

The third  party  suppliers  and  customers  section  includes  the  process  of
identifying and prioritizing  critical suppliers and customers and communicating
with them about their plans and progress in  addressing  the Year 2000  problem.
Detailed  evaluations  of the most critical  third parties were  completed as of
December 31, 1998.

Contingency  planning  for all areas  started in January 1999 is completed as of
March 31, 1999.

The total cost  related to becoming  Year 2000  compliant  is not expected to be
material to the Company's  financial  position.  The  acquisition of a mid-range
computer in 1995  minimized  the exposure to Year 2000  problems.  The estimated
cost of the Year 2000 Project is approximately  $200,000 of which  approximately
$100,000  was  expensed  in the first six months of fiscal  1999 and $50,000 was
expensed as of the end of the Company's fiscal year ended September 30, 1998.

The  failure  to  correct  a  material  Year  2000  problem  could  result in an
interruption   in,  or  failure  of,  certain  normal  business   activities  or
operations.  Such failures could  materially and adversely  affect the Company's
results of  operations,  liquidity and financial  condition.  Due to the general
uncertainty  inherent  in the  Year  2000  problem,  resulting  mostly  from the
uncertainty of the Year 2000  readiness of third-party  suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000  failures  will  have  a  material  impact  on  the  Company's  results  of
operations,  liquidity or financial condition. The Year 2000 Project is expected
to significantly  reduce the Company's level of uncertainty  about the Year 2000
problem and, in particular,  about the Year 2000 compliance and readiness of its
material external agents.  The Company believes that, with the completion of the
Project as scheduled,  the  possibility of significant  interruptions  of normal
operations should be reduced.
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      Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material  change  during the first six months  ended March 31,
1999,  from the disclosures  about market risk provided in the Company's  Annual
Report 10-K for the year ended September 30, 1998.

                           PART II. OTHER INFORMATION

                  Item 6.  Exhibits  and  Reports on Form 8-K (a) The  following
exhibit is filed as a part of this report:

EXHIBIT 27  -- FINANCIAL DATA SCHEDULE

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SIGNATURES

Pursuant  to the  requirements  of the  Securities  Exchange  Act of  1934,  the
Registrant  has duly  caused  this  report  to be  signed  on its  behalf by the
undersigned thereunto duly authorized.







STEEL TECHNOLOGIES INC.
(Registrant)







  By  ________________        
                                 Joseph P. Bellino
                                 Chief Financial Officer
                            (Principal Financial and
                            Chief Accounting Officer)




Dated May 12, 1999


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