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, 2001

                                       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)

                                 Not applicable
--------------------------------------------------------------------------------
   (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 10,223,503 shares outstanding of the Registrant's  common stock as of
April 30, 2001.


                                       1
<PAGE>





                             STEEL TECHNOLOGIES INC.

                                      INDEX



                                                                     Page Number
PART I.     FINANCIAL INFORMATION

Item 1. Financial Statements

        Condensed Consolidated Balance Sheets March 31, 2001
        (Unaudited) and September 30, 2000 (Audited) .................    3

        Condensed Consolidated Statements of Operations and Comprehensive
        Income (Loss) Three months and Six months ended March 31, 2001
        and 2000 (Unaudited) .........................................    4

        Condensed Consolidated Statements of Cash Flows
        Six months ended March 31, 2001 and 2000 (Unaudited) .........    5

        Notes to Condensed Consolidated Financial Statements (Unaudited) 6-9

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations ........................................  10-13

Item 3. Quantitative and Qualitative Disclosures About Market
        Risk .........................................................   14


                                       2
<PAGE>


                     Part I. - FINANCIAL INFORMATION
                      Item 1. Financial Statements

                         STEEL TECHNOLOGIES INC.
                  Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
                                                      March 31      September 30
                                                        2001            2000
                                                     -----------    ------------
(In thousands)                                       (Unaudited)      (Audited)
--------------------------------------------------------------------------------
<S>                                                   <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents ...................      $   2,043       $   4,469
   Trade accounts receivable, net ..............         66,882          67,039
   Inventories .................................         74,906          79,925
   Deferred income taxes .......................          2,579           2,579
   Prepaid expenses and other assets ...........          1,171           1,043
                                                      ---------       ---------
      Total current assets .....................        147,581         155,055

Property, plant and equipment, net .............        115,685         118,214
Investments in corporate joint ventures ........         13,341          20,756
Goodwill, net of amortization ..................         19,246          19,613
Other assets ...................................          1,567           1,751
                                                      ---------       ---------
                                                      $ 297,420       $ 315,389
                                                      =========       =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ............................      $  46,775       $  44,645
   Accrued liabilities .........................          8,230           6,734
   Income taxes payable ........................             76            --
   Long-term debt due within one year ..........        100,371           6,248
                                                      ---------       ---------
      Total current liabilities ................        155,452          57,627

Long-term debt .................................          6,300         115,394
Deferred income taxes ..........................         15,159          15,240
Other long term liabilities ....................           --                96
                                                      ---------       ---------
      Total liabilities ........................        176,911         188,357
                                                      ---------       ---------
Commitments and contingencies ..................           --              --
 Shareholders' equity:
   Preferred stock .............................           --              --
   Common stock ................................         17,318          17,287
   Treasury stock ..............................        (15,141)        (13,811)
   Additional paid-in capital ..................          4,909           4,909
   Retained earnings ...........................        115,927         120,125
   Accumulated other comprehensive loss ........         (2,504)         (1,478)
                                                      ---------       ---------
     Total shareholders' equity ................        120,509         127,032
                                                      ---------       ---------
                                                      $ 297,420       $ 315,389
                                                      =========       =========
</TABLE>


The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

                                       3
<PAGE>

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

(Amounts in thousands,                Three Months Ended     Six Months Ended
except per share data, unaudited)          March 31              March 31
--------------------------------------------------------------------------------
                                        2001       2000       2001       2000
                                      ------------------------------------------
<S>                                   <C>        <C>        <C>        <C>
Sales ................................ $106,561   $120,910   $217,422   $225,800
Cost of goods sold ...................   94,184    106,290    193,577    197,959
                                       --------   --------   --------   --------
      Gross profit ...................   12,377     14,620     23,845     27,841

Selling, general and
   administrative expenses ...........    7,276      7,527     14,251     14,095
Equity in net income (loss) of
   unconsolidated corporate joint
   venture (including impairment
   charge of $7.5 million ............   (7,648)       205     (7,414)       609
                                       --------   --------   --------   --------
   Operating income (loss) ...........   (2,547)     7,298      2,180     14,355

Interest expense, net ................    1,831      1,939      3,719      3,283
                                       --------   --------   --------   --------
   Income (loss) before income taxes .   (4,378)     5,359     (1,539)    11,072

Provision for income taxes ...........      978      2,065      2,035      4,127
                                       --------   --------   --------   --------
    Net income (loss) ................   (5,356)  $  3,294   $ (3,574)  $  6,945
                                       --------   --------   --------   --------
Diluted weighted average number of
   common shares outstanding .........   10,230     10,929     10,310     11,058
                                       ========   ========   ========   ========

Diluted earnings (loss) per common
   share ............................. $ (0.52)   $   0.30   $ (0.35)   $   0.63
                                       ========   ========   ========   ========

Basic weighted average number of
   common shares outstanding .........   10,230     10,882     10,310     10,989
                                       ========   ========   ========   ========

Basic earnings per common share ...... $ (0.52)   $   0.30   $ (0.35)   $   0.63
                                       ========   ========   ========   ========

Cash dividends per common share ...... $   --     $   --     $   0.06   $   0.06
                                       ========   ========   ========   ========
</TABLE>

            Condensed Consolidated Statements of Comprehensive Income
<TABLE>
<CAPTION>

(In thousands)                        Three Months Ended     Six Months Ended
(Unaudited)                                March 31              March 31
---------------------------------------------------------------------------------
                                        2001       2000       2001       2000
                                      -------------------------------------------
<S>                                   <C>        <C>        <C>         <C>
Net income (loss) .................... $(5,356)  $  3,294   $ (3,574)   $  6,945
  Foreign currency translation
        adjustment ...................    (612)       (45)    (1,026)        (19)
                                       --------   --------   --------    --------
Comprehensive income (loss) .......... $(5,968)   $ 3,249    $(4,600)    $ 6,926
                                       ========   ========   ========    ========
</TABLE>

The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

                                       4
<PAGE>

                             STEEL TECHNOLOGIES INC.
                 Condensed Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
(In thousands)                                               Six months ended
(Unaudited)                                                       March 31
--------------------------------------------------------------------------------
                                                             2001       2000
                                                           ---------------------
<S>                                                       <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) ..................................   $ (3,574)   $  6,945
   Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
       Depreciation ...................................      7,201       6,489
       Amortization ...................................        366         263
       Deferred income taxes ..........................         64       1,316
       Equity in net loss (income) of unconsolidated
         corporate joint venture ......................      7,414        (609)
       (Gain) loss on sale of assets ..................       (203)         46
       Increase (decrease) in cash resulting from
         changes in:
             Trade accounts receivable ................       (363)    (14,324)
             Inventories ..............................      4,565     (23,056)
             Prepaid expenses and other assets ........       (120)       (162)
             Accounts payable .........................      2,454      16,195
             Accrued liabilities and income taxes .....      1,581      (2,041)
                                                          ---------   ---------
Net cash provided by (used in) operating activities ...     19,385      (8,938)
                                                          ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment .........     (5,719)    (11,128)
   Proceeds from sale of property, plant and equipment         658          86
   Acquisition, net of cash acquired ..................        --      (12,122)
                                                          ---------   ---------
Net cash used in investing activities .................     (5,061)    (23,164)
                                                          ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt .......................      4,000      42,000
   Principal payments on long-term debt ...............    (18,972)     (6,687)
   Cash dividends on common stock .....................       (624)       (665)
   Repurchase of common stock .........................     (1,330)     (4,642)
   Net issuance of common stock .......................         30          31
   Other ..............................................        175        (700)
                                                          ---------   ---------
Net cash (used in) provided by financing activities ...    (16,721)     29,337
                                                          ---------   ---------
Effect of exchange rate changes on cash ...............        (29)        (26)
                                                          ---------   ---------
Net (decrease) increase in cash and cash equivalents ..     (2,426)     (2,791)
Cash and cash equivalents, beginning of year ..........      4,469      12,578
                                                          ---------   ---------
Cash and cash equivalents, end of period ..............   $  2,043    $  9,787
                                                          =========   =========
Supplemental Cash Flow Disclosures:
  Cash payment for interest ...........................   $  4,151    $  3,255
  Cash payment for income taxes .......................   $  2,331    $  4,260

Supplemental Schedule of Noncash Investing Activities:

  Fair value of assets acquired, net of cash acquired
     of $0 and $1,228, respectively ...................   $    --     $ 17,914
  Liabilities assumed .................................        --        5,792
                                                          ---------   ---------
  Net cash paid                                           $    --     $ 12,122
                                                          =========   =========
</TABLE>

The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.

                                       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, 2001 and the condensed
consolidated  statements of income,  comprehensive income and cash flows for the
three and six months  ended  March 31,  2001 and 2000 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 31, 2001 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, 2000.  The results of operations  for the nine months ended
March 31, 2001 are not necessarily  indicative of the operating  results for the
full year.

2.  INVENTORIES:

<TABLE>
<CAPTION>
Inventory consists of:
                                                      March 31     September 30
                                                        2001           2000
                                                     -----------   ------------
(In thousands)                                        Unaudited       Audited
-------------------------------------------------------------------------------
<S>                                                 <C>               <C>
Raw materials ....................................   $   59,966      $   59,951
Finished goods and work in process ...............       14,940          19,974
                                                     ----------      ----------
                                                     $   74,906      $   79,925
                                                     ==========      ==========
</TABLE>


                                       6
<PAGE>

3.  NET INCOME PER SHARE COMPUTATIONS:

The following is a  reconciliation  of the  denominator of the basic and diluted
per share computations:

<TABLE>
<CAPTION>

                                                          Three Months Ended
(In thousands, except per share results)                       March 31
-----------------------------------------------------------------------------
                                                            2001      2000
                                                          -------------------
<S>                                                       <C>       <C>
Net income (loss) ....................................... $(5,356)  $ 3,294
                                                          -------   -------
Shares (denominator) used for
  diluted per share computations:
    Weighted average shares of common stock outstanding .  10,230    10,882
    Plus: dilutive effect of stock options ..............     --         47
                                                          -------   -------
       Diluted weighted average shares                     10,230    10,929
                                                          -------   -------
Shares (denominator) used for
  basic per share computations:
    Weighted average shares of common stock outstanding .  10,230    10,882
                                                          -------   -------

Net income (loss) per share data:
    Diluted ............................................. $(0.52)   $ 0.30
                                                          =======   =======

    Basic ............................................... $(0.52)   $ 0.30
                                                          =======   =======
</TABLE>
<TABLE>
<CAPTION>
                                                           Six Months Ended
(In thousands, except per share results)                       March 31
-----------------------------------------------------------------------------
                                                            2001      2000
                                                          -------------------
<S>                                                       <C>       <C>
Net income .............................................. $(3,574)  $ 6,945
                                                          -------   -------
Shares (denominator) used for
  diluted per share computations:
    Weighted average shares of common stock outstanding .  10,230    10,989
    Plus: dilutive effect of stock options ..............     --         69
                                                          -------   -------
       Diluted weighted average shares                     10,230    11,058
                                                          -------   -------
Shares (denominator) used for
  basic per share computations:
    Weighted average shares of common stock outstanding .  10,230    10,989
                                                          -------   -------

Net income per share data:
    Diluted ............................................. $(0.35)   $ 0.63
                                                          =======   =======

    Basic ............................................... $(0.35)   $ 0.63
                                                          =======   =======

</TABLE>

Options to  purchase  791,500  shares at March 31, 2001 were  excluded  from the
calculations above because they were antidilulitve.  Options to purchase 320,000
shares at March 31, 2000, respectively were excluded from the calculations above
because the exercise  prices on the options were greater than the average market
price of the Company's stock during the periods.

                                      7

<PAGE>

4.  INVESTMENTS IN UNCONSOLIDATED CORPORATE JOINT VENTURES

On January 22, 2001,  the Company  announced it would  record  certain  one-time
charges  relating to recent  strategic  initiatives  involving its joint venture
operations  during the  second  quarter of fiscal  2001 at Mi-Tech  Steel,  Inc.
(Mi-Tech Steel) and Processing Technology Inc (PTI).

In  March  2001,  Mi-Tech  Steel,  an  unconsolidated  corporate  joint  venture
accounted for by the equity method, discontinued its Decatur, Alabama operation.
Mi-Tech  Steel is  pursuing  alternatives  to sell its  assets  in  Decatur.  In
accordance with Statement of Financial Accounting Standards No. 121,"Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed
of," Mi-Tech Steel recorded an impairment  charge  associated with this facility
based on the Company's  estimates of fair value.  The Company's share of Mi-Tech
Steel's impairment charges recorded during the second quarter of fiscal 2001 was
approximately $6.5 million.

Summarized condensed financial information for Mi-Tech Steel follows:

                                                       March 31, 2001
  Balance Sheet (In Thousands)                           (Unaudited)
  ----------------------------                         --------------
  Assets:
     Current assets ..................................    $ 51,912
     Other assets ....................................    $ 32,497

  Liabilities:
     Current liabilities .............................    $ 34,790
     Long-term liabilities ...........................    $ 22,936


                                                        For the Six
                                                        Months Ended
                                                       March 31, 2001
  Income Statement (In Thousands)                        (Unaudited)
  -------------------------------                      ---------------

  Net Sales                                               $ 70,561

  Net Loss (including impairment charge of
     approximately $13 million)                           $ 12,724

During the second quarter of fiscal 2001, the Company determined that Processing
Technology Inc. (PTI), an  unconsolidated  corporate joint venture accounted for
by the cost method, was not able to sustain an earnings capacity which justified
the  carrying  amount  of its  investment  due to  the  deteriorating  financial
condition of PTI and its principal customer.  Accordingly, the Company wrote off
its  approximate  $1 million  investment  in PTI in accordance  with  Accounting
Principles   Board  Opinion  No.  18,  "The  Equity  Method  of  Accounting  for
Investments in Common Stock."

                                      8
<PAGE>

5.  LONG-TERM DEBT

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.  None of these  covenants would restrict the completion of
currently planned capital  expenditures.  As a result of the impairment  charges
recorded  during the second  quarter of fiscal 2001 (see Note 4), the Company is
not  currently in  compliance  with certain bank  covenants.  The Company is not
currently  in  compliance  with the  current  ratio  required  under the private
placement note.  Under the line of credit  agreement,  the definition of current
liabilities  excludes line of credit borrowings.  However, the private placement
note agreement does not exclude these  borrowings from its definition of current
liabilities.  Since the line of credit  is  currently  due  December  31,  2001,
Statement of Financial Accounting Standards No. 6, "Classification of Short-Term
Obligations  Expected to Be  Refinanced,"  requires  the  classification  of the
Company's line of credit borrowings and private placement  borrowings as current
liabilities.

Management  expects to  refinance  its  existing  line of credit  facility  on a
long-term basis prior to the maturity of its existing date of December 31, 2001.
Upon  refinancing  the line of credit  facility,  the  Company  will again be in
compliance with all bank covenants.

At March 31,  2001,  Steel  Technologies  had  $106,671,000  of  long-term  debt
outstanding,  of which  $100,371,000 is classified as a current  liability.  The
Company  classified  approximately  $94,000,000  of debt as a current  liability
because of the line of credit  maturity date and covenant  violations  described
above.

6. ADOPTION OF ACCOUNTING PRONOUNCEMENT

In June 1998,  the  Financial  Accounting  Standards  Board issued  Statement of
Financial Accounting  Standards No. 133, "Accounting for Derivative  Instruments
and Hedging  Activities"  (SFAS No. 133). In general,  SFAS No. 133, as amended,
requires all  derivatives  be recognized as either assets or  liabilities in the
balance sheet at their fair value,  and sets forth the manner in which gains and
losses  thereon are to be  recorded.  The  treatment  of such gains or losses is
dependent  upon the type of  exposure,  it any,  for  which  the  derivative  is
designated as a hedge.

The Company  adopted  SFAS No. 133 on October 1, 2000 and the  adoption  did not
have  any  impact  on the  Company's  results  of  operations  or its  financial
position.


                                      9
<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
business interruptions affecting automotive  manufacturers;  competitive factors
such as pricing and availability of steel; reliance on key customers; ability to
integrate  acquisitions;  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 sales of  $106,561,000  for the second quarter ended
March 31,  2001,  a decrease  of 12% from sales of  $120,910,000  for the second
quarter ended March 31, 2000.  Tons shipped of  Company-owned  steel products in
the second  quarter of fiscal 2001  decreased  approximately  7% compared to the
second quarter of fiscal 2000 while the average  selling price of  Company-owned
steel products for the second quarter  fiscal 2001  decreased  approximately  4%
from the previous year.

Sales for the six months ended March 31, 2001  decreased  by 4% to  $217,422,000
compared to  $225,800,000  for the six months ended March 31, 2000. Tons shipped
in the first six months of fiscal  2001  decreased  1% compared to the first six
months of fiscal 2000.  Average selling prices of steel for the first six months
of fiscal 2001 decreased approximately 2% as compared to the previous year.

The  Company  focuses  significant  resources  on the  automotive  industry  and
generates a major portion of business from selling manufacturing component parts
to the automotive  industry.  The Company continues to increase market share and
to develop a  substantial  amount of new  business  with both  existing  and new
customers which should help mitigate the effects of slowing demand levels in the
automotive industry.

The gross profit margin was 11.6% and 11.0% in the second quarter and six months
of fiscal 2001,  respectively  compared to 12.1% and 12.3% in the second quarter
and six months of fiscal 2000,  respectively.  The  decreases  are primarily the
result of selling price  decreases to customers  following a softer raw material
cost  environment  which  occurred in the later half of fiscal 2000.  Should raw
material  costs increase  significantly  in the second half of fiscal year 2001,
gross  margins  could be  negatively  impacted as the Company does not expect to
fully pass along these increases to its customers.  In general,  production cost
efficiencies and product mix  improvements  may positively  impact gross margins
and somewhat offset rising raw material costs.

                                       10
<PAGE>

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 for the second quarter decreased  approximately
3.4% from the  comparable  quarter of fiscal  2000.  The  decrease is  primarily
attributable  to  efforts  by the  Company  to  reduce  costs in  response  to a
weakening economy.

Selling,  general and administrative  expenses for the first half of fiscal 2001
increased 1% from the comparable first half of fiscal 2000. Selling, general and
administrative  expenses  as a  percentage  of sales  were  6.8% for the  second
quarter of fiscal  2001 as  compared  to 6.2% for the  second  quarter of fiscal
2000. Selling, general and administrative expenses as a percentage of sales were
6.6% for the six months  ended  March 31,  2001 as  compared to 6.2% for the six
months  ended  March 31,  2000.  The  increase  was  primarily  attributable  to
additional  expenses  from the  addition of Custom  Steel Inc.  and Custom Steel
Processing, Inc, collectively Custom Steel (now wholly owned subsidiaries of the
Company) which were  partially  offset by efforts by the Company to reduce costs
in response to a weakening economy.

The Company's share of loss of its joint venture operations was $7.6 million and
$7.4 million,  respectively for the second quarter and six months of fiscal 2001
compared to income of $205,000 and $609,000, respectively for the second quarter
and six months  ended March 31,  2000.  This  includes  the  Company's  share of
approximately  $7.5  million of asset  impairment  charges  recorded  during the
second fiscal quarter of 2001 relating to its joint venture operations (see Note
4 of the Company's Notes to Condensed Consolidated Financial Statements).

Net  interest  expense  for the  second  quarter of fiscal  2001 was  $1,831,000
compared to $1,939,000  for the second  quarter of fiscal 2000.  The decrease is
primarily the result of lower average  borrowings  during the second  quarter of
fiscal 2001 and slightly lower interest  rates.  The Company's  borrowings  were
higher in the second quarter of fiscal 2000 to finance the acquisition of Custom
Steel and the Company's working capital needs.

Net  interest  expense  for the first six months of fiscal  2001 was  $3,719,000
compared to $3,283,000 for first six months of fiscal 2000.  Average  borrowings
during the first six months of fiscal 2001 were higher than  average  borrowings
for the comparable  period in fiscal 2000 and interest income from the Company's
Mexican  subsidiary  was  lower  as a  result  of  completion  of the  Matamoros
construction in fiscal 2001.

Excluding the asset impairment  charges included in equity in earnings (loss) of
joint  ventures  during the second  quarter of fiscal  2001 and its  related tax
effect,  the Company's  effective  income tax rate was  approximately  47.8% and
42.7%,  respectively  for the  second  quarter  and six  months of  fiscal  2001
compared  to 38.5% and 37.3% for the  comparable  periods  of fiscal  2000.  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, and a higher
percentage  of overall  earnings  from  items not  deductible  for tax  purposes
including goodwill amortization.


                                       11
<PAGE>

Liquidity and Capital Resources
-------------------------------

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.  During the first six months of fiscal 2001, inventory decreased
$4,565,000 as the Company  reduced its inventory  levels to reflect lower demand
from customers.  Accounts receivable  decreased by $363,000 and accounts payable
increased   $2,454,000.   These  factors,   along  with  non-cash   charges  for
depreciation  and  amortization,  contributed to $19,385,000 of cash provided by
operations.  Cash flows from operations and available borrowing capabilities are
expected to meet the needs of the Company throughout fiscal 2001.

Capital   expenditures   for  the  first  six  months  of  fiscal  2001  totaled
approximately $5,700,000.  The major expenditures were for the completion of the
construction of Matamoros,  Mexico facility and certain productivity improvement
projects.  Steel Technologies continues to expand production capacity and invest
in automated packaging lines to serve the growing needs of customers. For fiscal
2001,  the capital  additions  to all  facilities  are  expected to  approximate
$12,000,000.

Steel Technologies  maintains an equity investment of approximately  $19,434,000
in its 90%-owned Mexican subsidiary.

As of January 1, 1999,  the Mexican  subsidiary  uses the peso as the functional
currency and the assets and liabilities of the Mexican subsidiary are translated
into U.S. dollars at the period end rate of exchange,  and revenues and expenses
are  translated  at average  rates of  exchanges  in effect  during the periods.
Resulting  translation  adjustments are reported as a component of comprehensive
income. Foreign currency transaction gains and losses are included in net income
when  incurred.  Prior to January 1, 1999,  the Mexican  economy was  considered
hyper-inflationary.  Accordingly,  the  Company  used the  monetary/non-monetary
method   of   accounting   for   foreign   currency   translation.   Under   the
monetary/non-monetary   method,   non-monetary   assets  and  liabilities   were
translated at historical  rates of exchange and the functional  currency was the
U.S. dollar.

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.  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.

The Company has a $100,000,000 line of credit agreement expiring on December 31,
2001,  with various  variable  options on the interest  rate,  none of which are
greater than the bank's prime.  During the first six months of fiscal 2001,  the
Company borrowed  $4,000,000 and repaid  approximately  $19,000,000 in debt from
its operating cash flows. At March 31, 2001,  there was $77,000,000  outstanding
on the credit facility.

The  line of  credit  is  expected  to be  sufficient  to  finance  the  capital
expenditure  plans as well as the working  capital  needs for fiscal  2001.  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.



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<PAGE>

At this time,  the Company has no known  material  obligations,  commitments  or
demands  that must be met beyond the next twelve  months other than the ten-year
private  placement note and the unsecured  bank line of credit.  The Company has
approximately  $22,840,000  outstanding  at March 31, 2001 on the ten-year  note
which requires annual principal  payments of approximately  $5.7 million through
March 2005.  Consistent  with prior years,  the  $100,000,000  line of credit is
expected to be renewed  prior to the maturity of its  existing  date of December
31, 2001.  However,  the Company is required to classify  this  obligation  as a
current  liability until such prospective  agreement is renewed.  (see Note 4 of
the Company's Notes to Condensed Consolidated Financial Statements).

As of March 31, 2001,  Steel  Technologies  had ($7,871,000) of working capital,
maintained a current ratio of .95:1 and had total debt at 47% of capitalization.
If the Company had renewed its line of credit  facility on a long-term  basis as
of March 31, 2001,  the current  portion of its debt would have been  $6,250,000
instead  of  $100,371,000  and the  Company  would have  $86,250,000  of working
capital  and a current  ratio of 2.4:1.  (see Note 4 of the  Company's  Notes to
Condensed Consolidated Financial Statements).

On January 22, 1998,  the Board of  Directors  approved a plan under which Steel
Technologies   may  repurchase  up  to  500,000  shares  of  its  common  stock.
Subsequently,  the Board of Directors  authorized  repurchase  of an  additional
1,000,000 shares on September 30, 1998 and another  additional  1,000,000 shares
on April 30, 2000 for a total of 2,500,000 shares.  Shares may be purchased from
time to time at prevailing prices in open market transactions, subject to market
conditions,  share price and other  considerations.  From the  inception  of the
program, the Company repurchased approximately 1,815,000 shares of common stock,
including 244,000 during the first six months of fiscal 2001.

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.

       Item 3. Quantitative and Qualitative Disclosures About Market Risk

There has been no material  change  during the first six months  ended March 31,
2001 from the  disclosures  about market risk provided in the  Company's  Annual
Report on Form 10-K for the year ended September 30, 2000.


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<PAGE>

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 11, 2001


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