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 June 30, 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 10,225,449 shares outstanding of the Registrant's  common stock as of
July 31, 2001.


                                       1
<PAGE>





                             STEEL TECHNOLOGIES INC.

                                      INDEX



                                                                     Page Number
PART I.     FINANCIAL INFORMATION

Item 1. Financial Statements

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

        Condensed Consolidated Statements of Operations and Comprehensive
        Income (Loss) Three months and Nine months ended June 30, 2001
        and 2000 (Unaudited) .........................................    4

        Condensed Consolidated Statements of Cash Flows
        Nine 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>
                                                       June 30      September 30
                                                         2001           2000
                                                     -----------    ------------
(In thousands)                                       (Unaudited)      (Audited)
--------------------------------------------------------------------------------
<S>                                                   <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents ...................      $   1,534       $   4,469
   Trade accounts receivable, net ..............         65,802          67,039
   Inventories .................................         71,331          79,925
   Deferred income taxes .......................          2,579           2,579
   Prepaid expenses and other assets ...........          1,170           1,043
                                                      ---------       ---------
      Total current assets .....................        142,416         155,055

Property, plant and equipment, net .............        114,646         118,214
Investments in corporate joint ventures ........         13,627          20,756
Goodwill, net of amortization ..................         19,063          19,613
Other assets ...................................          1,573           1,751
                                                      ---------       ---------
                                                      $ 291,325       $ 315,389
                                                      =========       =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ............................      $  41,390       $  44,645
   Accrued liabilities .........................          8,587           6,734
   Income taxes payable ........................          1,560            --
   Long-term debt due within one year ..........         95,402           6,248
                                                      ---------       ---------
      Total current liabilities ................        146,939          57,627

Long-term debt .................................          6,072         115,394
Deferred income taxes ..........................         14,677          15,240
Other long term liabilities ....................           --                96
                                                      ---------       ---------
      Total liabilities ........................        167,688         188,357
                                                      ---------       ---------
Commitments and contingencies ..................           --              --
 Shareholders' equity:
   Preferred stock .............................           --              --
   Common stock ................................         17,332          17,287
   Treasury stock ..............................        (15,141)        (13,811)
   Additional paid-in capital ..................          4,909           4,909
   Retained earnings ...........................        117,885         120,125
   Accumulated other comprehensive loss ........         (1,348)         (1,478)
                                                      ---------       ---------
     Total shareholders' equity ................        123,637         127,032
                                                      ---------       ---------
                                                      $ 291,325       $ 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     Nine Months Ended
except per share data, unaudited)           June 30               June 30
--------------------------------------------------------------------------------
                                        2001       2000       2001       2000
                                      ------------------------------------------
<S>                                   <C>        <C>        <C>        <C>
Sales ................................ $107,097   $121,936   $324,519   $347,736
Cost of goods sold ...................   94,202    109,349    287,779    307,308
                                       --------   --------   --------   --------
      Gross profit ...................   12,895     12,587     36,740     40,428

Selling, general and
   administrative expenses ...........    7,460      7,269     21,711     21,364
Equity in net income (loss) of
   unconsolidated corporate joint
   venture (including impairment
   charge of $7.5 million ............      285        268     (7,129)       877
                                       --------   --------   --------   --------
   Operating income ..................    5,720      5,586      7,900     19,941

Interest expense, net ................    1,514      1,847      5,233      5,130
                                       --------   --------   --------   --------
   Income before income taxes ........    4,206      3,739      2,667     14,811

Provision for income taxes ...........    1,635      1,187      3,670      5,314
                                       --------   --------   --------   --------
    Net income (loss) ................    2,571      2,552   $ (1,003)  $  9,497
                                       --------   --------   --------   --------
Diluted weighted average number of
   common shares outstanding .........   10,272     10,739     10,281     10,952
                                       ========   ========   ========   ========

Diluted earnings (loss) per common
   share ............................. $  0.25    $   0.24   $ (0.10)   $   0.87
                                       ========   ========   ========   ========

Basic weighted average number of
   common shares outstanding .........   10,223     10,730     10,281     10,903
                                       ========   ========   ========   ========

Basic earnings (loss) per common share $  0.25    $   0.24   $ (0.10)   $   0.87
                                       ========   ========   ========   ========

Cash dividends per common share ...... $  0.06    $   0.06   $   0.12   $   0.12
                                       ========   ========   ========   ========
</TABLE>

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

(In thousands)                        Three Months Ended     Nine Months Ended
(Unaudited)                                 June 30               June 30
--------------------------------------------------------------------------------
                                        2001       2000       2001       2000
                                      ------------------------------------------
<S>                                   <C>        <C>        <C>        <C>
Net income (loss) .................... $ 2,571   $  2,552    $(1,003)   $ 9,497
  Foreign currency translation
        adjustment ...................   1,156       (194)       130       (213)
                                       --------   --------   --------   --------
Comprehensive income (loss) .......... $ 3,727    $ 2,358    $  (873)   $ 9,284
                                       ========   ========   ========   ========
</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)                                               Nine months ended
(Unaudited)                                                       June 30
--------------------------------------------------------------------------------
                                                             2001       2000
                                                           ---------------------
<S>                                                       <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income (loss) ..................................   $ (1,003)   $  9,497
   Adjustments to reconcile net income (loss) to net
   cash provided by (used in) operating activities:
       Depreciation ...................................     10,923       9,857
       Amortization ...................................        548         442
       Deferred income taxes ..........................       (555)      1,366
       Equity in net loss (income) of unconsolidated
         corporate joint venture ......................      7,129        (877)
       (Gain) loss on sale of assets ..................        (21)         13
       Increase (decrease) in cash resulting from
         changes in:
             Trade accounts receivable ................      1,267     (14,524)
             Inventories ..............................      8,570     (16,363)
             Prepaid expenses and other assets ........       (122)       (523)
             Accounts payable .........................     (3,155)      5,621
             Accrued liabilities and income taxes .....      3,288      (2,180)
                                                          ---------   ---------
Net cash provided by (used in) operating activities ...     26,869      (7,671)
                                                          ---------   ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment .........     (8,020)    (16,442)
   Proceeds from sale of property, plant and equipment         737         328
   Acquisition, net of cash acquired ..................        --      (12,122)
                                                          ---------   ---------
Net cash used in investing activities .................     (7,283)    (28,236)
                                                          ---------   ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt .......................      4,000      39,000
   Principal payments on long-term debt ...............    (24,169)     (6,872)
   Cash dividends on common stock .....................     (1,237)     (1,311)
   Repurchase of common stock .........................     (1,330)     (5,383)
   Net issuance of common stock .......................         45          46
   Other ..............................................        175        (700)
                                                          ---------   ---------
Net cash (used in) provided by financing activities ...    (22,516)     24,780
                                                          ---------   ---------
Effect of exchange rate changes on cash ...............         (5)        (24)
                                                          ---------   ---------
Net (decrease) increase in cash and cash equivalents ..     (2,935)    (11,151)
Cash and cash equivalents, beginning of year ..........      4,469      12,578
                                                          ---------   ---------
Cash and cash equivalents, end of period ..............   $  1,534    $  1,427
                                                          =========   =========
Supplemental Cash Flow Disclosures:
  Cash payment for interest ...........................   $  6,134    $  5,618
  Cash payment for income taxes .......................   $  2,513    $  5,741

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 June 30, 2001 and the condensed
consolidated  statements  of income and  comprehensive  income for the three and
nine months ended June 30, 2001 and 2000, and condensed  consolidated cash flows
for the nine  months  ended  June 30,  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 June 30, 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
June 30, 2001 are not  necessarily  indicative of the operating  results for the
full year.

2.  INVENTORIES:

<TABLE>
<CAPTION>
Inventory consists of:
                                                      June 30      September 30
                                                        2001           2000
                                                     -----------   ------------
(In thousands)                                        Unaudited       Audited
-------------------------------------------------------------------------------
<S>                                                 <C>               <C>
Raw materials ....................................   $   53,824      $   59,951
Finished goods and work in process ...............       17,507          19,974
                                                     ----------      ----------
                                                     $   71,331      $   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)                        June 30
-----------------------------------------------------------------------------
                                                            2001      2000
                                                          -------------------
<S>                                                       <C>       <C>
Net income .............................................. $ 2,571   $ 2,552
                                                          -------   -------
Shares (denominator) used for
  diluted per share computations:
    Weighted average shares of common stock outstanding .  10,223    10,730
    Plus: dilutive effect of stock options ..............      49         9
                                                          -------   -------
       Diluted weighted average shares                     10,272    10,739
                                                          -------   -------
Shares (denominator) used for
  basic per share computations:
    Weighted average shares of common stock outstanding .  10,223    10,730
                                                          -------   -------

Net income per share data:
    Diluted ............................................. $ 0.25    $ 0.24
                                                          =======   =======

    Basic ............................................... $ 0.25    $ 0.24
                                                          =======   =======
</TABLE>
<TABLE>
<CAPTION>
                                                           Nine Months Ended
(In thousands, except per share results)                        June 30
-----------------------------------------------------------------------------
                                                            2001      2000
                                                          -------------------
<S>                                                       <C>       <C>
Net income (loss) ....................................... $(1,003)  $ 9,497
                                                          -------   -------
Shares (denominator) used for
  diluted per share computations:
    Weighted average shares of common stock outstanding .  10,281    10,903
    Plus: dilutive effect of stock options ..............     --         49
                                                          -------   -------
       Diluted weighted average shares                     10,281    10,952
                                                          -------   -------
Shares (denominator) used for
  basic per share computations:
    Weighted average shares of common stock outstanding .  10,281    10,903
                                                          -------   -------

Net income (loss) per share data:
    Diluted ............................................. $(0.10)   $ 0.87
                                                          =======   =======

    Basic ............................................... $(0.10)   $ 0.87
                                                          =======   =======

</TABLE>

Options to purchase 577,500 at June 30, 2001 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 three months ended June 30, 2001.
Options to  purchase  791,500  shares at June 30,  2001 were  excluded  from the
calculations  above  because they were  antidilulitve  for the nine months ended
June 30, 2001. Options to purchase 587,500 shares at June 30, 2000 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  totaling  $7.5  million  before  taxes  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) described below.

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:


                                                        June 30, 2001
  Balance Sheet (In Thousands)                           (Unaudited)
  ----------------------------                          -------------
  Assets:
     Current assets ..................................    $ 42,178
     Other assets ....................................    $ 32,134

  Liabilities:
     Current liabilities .............................    $ 32,635
     Long-term liabilities ...........................    $ 14,423


                                                         For the Nine
                                                         Months Ended
                                                        June 30, 2001
  Income Statement (In Thousands)                        (Unaudited)
  -------------------------------                      ---------------

  Net Sales                                               $103,472

  Net Loss (including impairment charge of
     approximately $13 million)                           $ 12,152

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 June  30,  2001,  Steel  Technologies  had  $101,474,000  of  long-term  debt
outstanding,  of which  $95,402,000  is classified as a current  liability.  The
Company  classified  approximately  $89,000,000  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.

7. SUBSEQUENT EVENT

In August 2001,  the Company  reached an agreement  in principal  with  Ferragon
Corporation of Cleveland,  Ohio, to purchase 49% of Ferragon's  Ferrolux  Metals
Co.,  LLC.  Ferrolux  Metals  is  a  steel  processor  specializing  in  exposed
automotive products. The transaction is expected to close within 60 days.

                                      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 $107,097,000 for the third quarter ended June
30, 2001,  a decrease of 12% from sales of  $121,936,000  for the third  quarter
ended June 30, 2000. Tons shipped of  Company-owned  steel products in the third
quarter of fiscal 2001 decreased  approximately 5% compared to the third quarter
of fiscal 2000 while the average selling price of  Company-owned  steel products
for the third quarter fiscal 2001 decreased  approximately  7% from the previous
year.

Sales for the nine months ended June 30, 2001  decreased  by 7% to  $324,519,000
compared to  $347,736,000  for the nine months ended June 30, 2000. Tons shipped
in the first nine months of fiscal 2001  decreased 2% compared to the first nine
months of fiscal 2000. Average selling prices of steel for the first nine months
of fiscal 2001 decreased approximately 5% 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 12.0% in the third  quarter of fiscal 2001 compared
to 10.3% in the third quarter of fiscal 2000.  The increase is  attributable  to
improved  productivity  as a result of  equipment  investments  and  upgrades at
several  facilities  and lower  material  costs which  mitigated  the effects of
selling price decreases to customers.

The gross  profit  margin for the nine  months  ended June 30, 2001 and 2000 was
11.3% and 11.6%,  respectively.  The decrease is 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,  gross margins could be negatively  affected.  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 third quarter and nine months increased
approximately  2.6% and 1.6% from the  comparable  third  quarter and first nine
months of  fiscal  2000.  Selling,  general  and  administrative  expenses  as a
percentage  of sales were 7.0% for the third  quarter of fiscal 2001 as compared
to  6.0%  for  the  third   quarter  of  fiscal  2000.   Selling,   general  and
administrative  expenses as a percentage  of sales were 6.7% for the nine months
ended June 30, 2001 as compared to 6.1% for the nine months ended June 30, 2000.
The increase was primarily a result of additional  expenses from the addition of
Custom Steel Inc. and Custom Steel Processing Corp.,  collectively  Custom Steel
(now wholly owned  subsidiaries of the Company) and an increase in the allowance
for doubtful accounts attributable to the weakening economy.

The Company's  share of income of its joint venture  operations was $285,000 and
$268,000,  respectively,  for the third  quarter  of fiscal  2001 and 2000.  The
Company's share of loss of its joint venture operations was $7.1 million for the
nine months of fiscal 2001 compared to income of $877,000 for the nine months of
fiscal 2000. This includes the Company's share of approximately  $7.5 million of
asset  impairment  charges before taxes recorded during the third 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  third  quarter  of fiscal  2001 was  $1,514,000
compared to  $1,847,000  for the third  quarter of fiscal 2000.  The decrease is
primarily  the result of lower  average  borrowings  during the third quarter of
fiscal 2001 as compared to the previous year's comparable  quarter and declining
interest rates experienced by the Company in 2001.

Net  interest  expense for the first nine  months of fiscal 2001 was  $5,233,000
compared to  $5,130,000  for first nine months of fiscal 2000.  Interest  income
from the Company's Mexican subsidiary was lower as a result of completion of the
Matamoros  construction in fiscal 2001 and foreign currency losses were incurred
in 2001 as a result of the strengthening peso relative to the dollar.

Excluding the asset  impairment  charges included in equity in net income (loss)
of joint  ventures  during the second quarter of fiscal 2001 and the related tax
benefit of approximately  $500,000,  the Company's effective income tax rate was
approximately  38.9% and  41.6%,  respectively  for the third  quarter  and nine
months of fiscal 2001 compared to 31.7% and 35.9% for the comparable  periods of
fiscal 2000. The increase in 2001 is  attributable to an adjustment in the third
quarter of 2000 to better reflect state income taxes realized from restructuring
the  Company  in 2000  and  lower  earnings  for  2001  which  created  a higher
percentage  of  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 nine months of fiscal 2001, inventory decreased
$8,570,000 as the Company reduced its inventory  levels to reflect  management's
efforts  to  increase  inventory  turnover.  Accounts  receivable  decreased  by
$1,267,000 from the lower level of customer sales and accounts payable decreased
$3,155,000.  These factors,  along with non-cash  charges for  depreciation  and
amortization,  contributed to  $26,869,000 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  nine  months  of  fiscal  2001  totaled
approximately $8,000,000.  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 to serve
the growing needs of customers and invest in automation to improve  productivity
and make its operations more efficient.  For fiscal 2001, the capital  additions
to all facilities are expected to approximate $10,000,000.

Steel Technologies  maintains an equity investment of approximately  $19,200,000
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 nine months of fiscal 2001, the
Company borrowed  $4,000,000 and repaid  approximately  $24,000,000 in debt from
its operating cash flows. At June 30, 2001, there was $72,000,000 outstanding on
the credit facility.




                                       12
<PAGE>

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.

In August 2001,  the Company  reached an agreement  in principal  with  Ferragon
Corporation of Cleveland,  Ohio, to purchase 49% of Ferragon's  Ferrolux  Metals
Co.,  LLC.  Ferrolux  Metals  is  a  steel  processor  specializing  in  exposed
automotive products. The transaction is expected to close within 60 days.

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 June 30, 2001 on the  ten-year  note
which requires annual  principal  payments of approximately  $5,700,000  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 5 of
the Company's Notes to Condensed Consolidated Financial Statements).

As of June 30, 2001,  Steel  Technologies  had  ($4,523,000) of working capital,
maintained a current ratio of .97:1 and had total debt at 45% of capitalization.
If the Company had renewed its line of credit  facility on a long-term  basis as
of June 30,  2001,  the current  portion of its debt would have been  $6,300,000
instead of $95,402,000 and the Company would have $84,579,000 of working capital
and a current ratio of 2.5:1.  (see Note 5 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 nine 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 nine months  ended June 30,
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.

                                       13
<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 August 14, 2001


                                      14