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 December 31, 1998

                                       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 11,277,256 shares outstanding of the Registrant's  common stock as of
January 29, 1999.

<PAGE>
                             STEEL TECHNOLOGIES INC.

                                      INDEX


                                                                           Page 
PART I.       FINANCIAL INFORMATION

     Item 1.  Financial Statements .....................................     6-7
     Item 2.  Management's  Discussion  and Analysis of Financial
              Condition and Results of Operations ......................    8-12

     Item 3.  Quantitative and Qualitative Disclosures About Market
              Risk .....................................................      12

PART II        OTHER INFORMATION

     Item 4.  Submission of Matters to a Vote of Security Holders ......      13

     Item 6.  Exhibits and Reports on Form 8-K .........................      14




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

(Amounts in thousands)                               December 31   September 30
--------------------------------------------------------------------------------
                                                        1998          1998
                                                     (Unaudited)    Audited)
                                                  ------------------------------
 <S>                                                   <C>            <C>  
ASSETS
Current assets:
   Cash and cash equivalents .....................    $ 11,794        $  4,778
   Trade accounts receivable, net ................      53,531          47,907
   Inventories ...................................      79,570          76,523
   Deferred income taxes .........................       1,641           1,621
   Prepaid expenses and other assets .............         852             748
                                                      --------        --------
      Total current assets .......................     147,388         131,577
                                                      ========        ========

Property, plant and equipment, net ...............     105,987         106,631

Investments in corporate joint ventures ..........      18,879          18,163

Goodwill, net of amortization ....................       8,901           9,060

Other assets .....................................       2,167           1,050
                                                      --------        --------
                                                      $283,322        $266,481
                                                      ========        ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ..............................    $ 43,168        $ 35,925
   Accrued liabilities ...........................       7,164           6,231
   Long-term debt due within one year ............       9,103           9,102
                                                      --------        --------
      Total current liabilities ..................      59,435          51,258

Long-term debt ...................................      95,132          88,300
Other liabilities ................................         937            --
Deferred income taxes ............................      13,673          13,247
                                                      --------        --------
     Total liabilities ...........................     169,177         152,805

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

Shareholders' equity:
   Preferred stock ...............................        --              --
   Common stock ..................................      17,003          16,928
   Treasury stock ................................      (5,816)         (3,792)
   Additional paid-in capital ....................       4,909           4,909
   Retained earnings .............................      99,489          97,071
   Foreign currency translation adjustment .......      (1,440)         (1,440)
                                                      --------        --------
                                                       114,145         113,676
                                                      --------        --------
                                                      $283,322        $266,481
                                                      ========        ========
</TABLE>
The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.


<PAGE>
<TABLE>
<CAPTION>
                             STEEL TECHNOLOGIES INC.
                   Condensed Consolidated Statements of Income
                        
                                                            Three Months Ended 
(Amounts in thousands, except per share data, unaudited)         December 31
-------------------------------------------------------------------------------- 
                                                              1998      1997
                                                           ---------------------
<S>                                                          <C>       <C>    
Sales .....................................................  $98,203   $96,449
Cost of goods sold ........................................   85,249    86,051
                                                             -------   -------
   Gross profit ...........................................   12,954    10,398

Selling, general and administrative expenses ..............    6,359     5,350
Equity in net income of unconsolidated
   corporate joint venture ................................      116       502
                                                             -------   -------
   Operating income .......................................    6,711     5,550

Interest expense ..........................................    1,705     1,562
                                                             -------   -------
   Income before income taxes .............................    5,006     3,988

Provision for income taxes ................................    2,015     1,497
                                                             -------   -------
   Net income .............................................  $ 2,991   $ 2,491
                                                             =======   =======

Diluted weighted average number of common
   shares outstanding .....................................   11,439    12,045
                                                             =======   =======
Diluted earnings per common share .........................  $  0.26   $  0.21
                                                             =======   =======
 Basic weighted average number of common
   shares outstanding .....................................   11,427    11,998
                                                             =======   =======
Basic earnings per common share ...........................  $  0.26   $  0.21
                                                             =======   =======
Cash dividends per common share ...........................  $  0.05   $  0.05
                                                             =======   =======
</TABLE>
                                                                    
The  accompanying  notes  are an  integral  part of the  condensed  consolidated
financial statements.


<PAGE>
<TABLE>
<CAPTION>
                             STEEL TECHNOLOGIES INC.
                 Condensed Consolidated Statements of Cash Flows
                                                             Three Months Ended    
    (Amounts in thousands, unaudited)                             December 31
--------------------------------------------------------------------------------
                                                              1998      1997
                                                           ---------------------
<S>                                                          <C>       <C>       
   Net Income .............................................  $ 2,991   $ 2,491
   Adjustments to reconcile net income to net cash
    provided by operating activities:
       Depreciation .......................................    3,056     2,748
       Amortization .......................................       94        56
       Deferred income taxes ..............................      406       480
       Equity in net income of unconsolidated corpo
       joint venture ......................................     (116)     (501)
       Loss on sale of assets .............................      (14)     --
       Increase (decrease) in cash resulting from
         changes in:
             Trade accounts receivable ....................   (5,584)   (6,325)
             Inventories ..................................   (3,046)    7,705
             Prepaids expenses and other assets ...........   (1,324)      239
             Accounts payable .............................    7,221     5,561
             Accrued liabilities and income taxes .........    2,132     1,424
                                                             -------   -------
Net cash provided by operating activities .................    5,816    13,878
                                                             -------   -------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment .............   (3,707)   (3,198)
   Proceeds for sale of property, plant and equipme .......    1,304      --
   Investment in unconsolidated joint venture .............     (600)     --
                                                             -------   -------
Net cash used in investing activities .....................   (3,003)   (3,198)
                                                             -------   -------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt ...........................    7,000      --
   Principal payments on long-term debt ...................     (167)   (5,167)
   Cash dividends on common stock .........................     (573)     (600)
   Repurchase of common stock .............................   (2,024)     --
   Net issuance of common stock under incentive
     stock option plans ...................................       75         3
                                                             -------   -------
Net cash provided by (used in) financing activities .......    4,311    (5,764)
                                                             -------   -------
Effect of exchange rate changes on cash ...................     (108)      (73)
                                                             -------   -------

Net increase in cash and cash equivalents .................    7,016     4,843
Cash and cash equivalents, beginning of year ..............    4,778     3,467
                                                             -------   -------
Cash and cash equivalents, end of period ..................  $11,794   $ 8,310
                                                             =======   =======
Supplemental Cash Flow Disclosures:
Cash payment for interest .................................  $ 1,759   $ 1,962
                                                             =======   =======

Cash payment for income taxes .............................  $  --     $    17
                                                             =======   =======

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



<PAGE>
                             STEEL TECHNOLOGIES INC.

              NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
                                   (Unaudited)

1.  CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:

The  condensed  consolidated  balance  sheet  as of  December  31,  1998 and the
condensed consolidated  statements of income and cash flows for the three months
periods  ended  December  31,  1998 and 1997 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 December 31, 1998 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 three months ended
December 31, 1998 are not  necessarily  indicative of the operating  results for
the full year.

2.  INVENTORIES:
<TABLE>
<CAPTION>
Inventory consists of:
(Amounts in thousands)                                December 31   September 30
--------------------------------------------------------------------------------
                                                         1998          1998
                                                       Unaudited      Audited
                                                  ------------------------------
<S>                                                   <C>            <C>   
Inventories consists of:
   Raw materials .................................    $ 62,488       $ 66,033
   Finished goods and work in process ............      17,082         10,490
                                                      --------       --------
                                                      $ 79,570       $ 76,523
                                                      ========       ========
 </TABLE>
3.  FOREIGN CURRENCY TRANSLATION:

Prior to January 1, 1997,  the monetary  assets and  liabilities  of the Mexican
subsidiary were  translated  into U.S.  dollars at the year-end rate of exchange
and revenues and expenses were translated at average rates of exchange in effect
during the period.  Resulting  translation  adjustments  were  accumulated  in a
separate component of shareholders'  equity.  Foreign currency transaction gains
and losses were included in net income when incurred. Effective January 1, 1997,
the  Company  changed  to the  monetary/non-monetary  method of  accounting  for
foreign   currency   translation   as  the  Mexican   economy   was   considered
hyper-inflationary  for financial reporting.  This method required  non-monetary
assets and liabilities to be translated at historical  rates of exchange and the
functional  currency  to  be  U.S.  dollars.   Mexico  ceased  to  be  a  highly
inflationary  economy effective for quarters  beginning after December 31, 1998.
The Mexican  subsidiary is expected to use the peso as the functional  currency.
The Company will then use the current rate method of translation and will report
translation adjustments as it did prior to January 1, 1997.

4.  NET INCOME PER SHARE COMPUTATIONS:

The following is a reconciliation  of the numerator of the basic and diluted per
share computations:
<TABLE>
<CAPTION>
                                                             Three Months Ended
(Amounts in thousands, except per share data)                     December 31
--------------------------------------------------------------------------------
                                                              1998      1997
                                                           ---------------------
<S>                                                           <C>      <C>    
Net income ................................................  $ 2,991   $ 2,491
                                                             -------   -------
Shares (denominator) used for diluted per share computations:
   Weighted average shares of common stock outstanding ....   11,427    11,998
   Plus: dilutive effect of stock options .................       12        47
                                                             -------   -------

          Adjusted weighted average shares ................   11,439    12,045
                                                             -------   -------
Shares (denominator) used for basic per share computations:
   Weighted average shares of common stock outstanding ....   11,427    11,998
                                                             -------   -------
Net income per share data:
   Diluted ................................................  $  0.26   $  0.21
                                                             =======   =======
   Basic ..................................................  $  0.26   $  0.21
                                                             =======   =======
</TABLE>
Options to  purchase  566,000  and  131,000  shares for the three  months  ended
December 31, 1998,  and 1997,  respectively  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 for the  three-month  periods ended  December 31, 1998 and
1997 were the same as net income  presented in the  accompanying  statements  of
income.


<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 first quarter  sales of  $98,203,000  for the
fiscal  quarter  ended  December  31,  1998,  an  increase  of 2% from  sales of
$96,449,000  for the first fiscal  quarter ended  December 31, 1997. The Roberts
Steel  Company  (now a  wholly  owned  subsidiary  of Steel  Technologies  Ohio)
acquired on July 1, 1998 added  $4,600,000  of revenues for the first quarter of
fiscal 1999. Sales of existing Steel  Technologies  steel processing  operations
decreased  by  approximately  $2,847,000  or 3%  from a year  ago.  The  Company
continues  to focus  significant  resources  on the  automotive  industry and to
generate a major portion of business from selling manufacturing  component parts
to the automotive industry.

Tons  shipped in the first  quarter of fiscal 1999  increased  approximately  8%
while the average  selling  prices of steel for the first quarter of fiscal 1999
decreased  approximately  6% from the previous  year.  The sales outlook is good
based on order activity and backlog.

The gross profit  margin  increased to 13.2% in the first quarter of fiscal 1999
compared to 10.8% in the first  quarter of fiscal  1998.  The  improvements  are
primarily  a result of  customer  and  product  mix  improvements,  productivity
increases,  a slight  reduction in raw materials prices and other operating cost
reductions.  The Company expects stable and, in some cases, weakening in pricing
of raw materials,  especially in hot rolled steel, as new  steelmaking  capacity
enters the market. However,  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 margin.
Additionally,  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 19% from the comparable
1998 period.  Selling,  general and  administrative  expenses as a percentage of
sales  increased to 6.5% for the first  quarter of fiscal 1999 from 5.5% for the
first  quarter of fiscal 1998.  The increase was primarily  attributable  to the
additional  expenses from 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 $116,000 and $502,000 for the first
quarter of fiscal 1999 and 1998, respectively. The slower than expected start up
of the Decatur,  Alabama operation impacted Mi-Tech's  profitability as compared
to the  first  quarter  of fiscal  1998.  The  Company  expects  similar  income
contributions from Mi-Tech for the balance of the current fiscal year.

Interest expense was $1,705,000 for the first quarter of fiscal 1999 compared to
$1,562,000  for the first quarter of fiscal 1998.  The increase is the result of
higher  average  borrowings  used to finance the  acquisition  of Roberts  Steel
Company.  The Company's  effective income tax rate was  approximately  40.2% and
37.5% for the first fiscal quarters of 1999 and 1998, respectively. 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 December 31, 1998,  Steel  Technologies  had $87,953,000 of working  capital,
maintained  a  current  ratio  of  2.5:1and  had  total  debt  at 48%  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  quarter of fiscal 1999,
increased  profit  levels  contributed  to the  generation of $5,816,000 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 first quarter of fiscal 1999 totaled  $3,707,000.
The majority of the  expenditures  were for the construction of the new Berkley,
South Carolina  plant,  which is expected to be completed by the middle of March
1999. 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  is  considered
hyper-inflationary  for financial reporting.  Accordingly,  the Company uses the
monetary/non-monetary   method  of  accounting.  The  impact  on  the  Company's
profitability is limited to the effect of currency  fluctuations  related to net
monetary assets, which were approximately $3,694,000, and $1,600,000 at December
31, 1998 and 1997 respectively.  Due to the costs of hedging currency risks, the
Company has not entered  into any hedging  arrangements.  Mexico  ceased to be a
highly inflationary  economy effective for quarters beginning after December 31,
1998.  The Mexican  subsidiary  is  expected  to use the peso as the  functional
currency.  The Company will then use the current rate method of translation  and
will report translation adjustments as it did prior to January 1, 1997.

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 December 31, 1998,  there was
$56,000,000  outstanding on the credit facility. The availability of $44,000,000
from the line of credit and funds  generated from  operations are expected to be
sufficient to finance capital  expenditure  plans as well as the working capital
needs  for  fiscal  1999.  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. The ten-year notes require principal payments beginning on March
1, 1999.  Any  additional  funds will be used for  growth,  including  strategic
acquisitions,  investment in joint venture,  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 December 31, 1998,  Steel  Technologies  had  $95,132,000  of 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.

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 first quarter of fiscal 1999, the Company repurchased
293,000 shares of its common stock at prevailing  market prices.  As of December
31, 1998, the Company had repurchased a total of approximately 714,000 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 December 31, 1998.

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 December 31, 1998, 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 80 percent of the manufacturing
equipment will be Year 2000 compliant by September 30, 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 have been completed as
of December 31, 1998.

Contingency  planning  for all areas was started in January 1999 and is expected
to be completed by March 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  $250,000 of which  approximately
$50,000  was  expensed  in the first  quarter  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.

       Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable.



<PAGE>
                           PART II. OTHER INFORMATION

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

The annual  meeting of  shareholders  was held on January 28, 1999.  The matters
voted upon at the meeting were the election of three  directors  for  three-year
terms and the ratification of independent auditors for the current fiscal year.

The number of votes cast for,  against or withheld  with respect to each nominee
for director elected at the meeting were as follows:

Nominee           Votes For           Votes Against     Votes Withheld

Merwin J. Ray     10,990,337                0                75,631
Bradford T. Ray   10,990,627                0                75,341
Doug A. Bawel     10,986,213                0                79,755


The number of votes cast for, against or abstained with respect to the selection
of  PricewaterhouseCoopers  LLP as the Company's independent accountants were as
follows:

                  Votes For             Votes Against     Votes Withheld
                  11,016,377               27,051             22,540


                     Item 6. Exhibit and Reports on Form 8-K

(a) The following exhibit is filed as a part of this report:

Exhibit 27--Financial Data Schedule - December 31, 1998.

(b) No report on from 8-K was filed during the quarter ended December 31, 1998

<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 February 13, 1999