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, 2005

                                       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____

Indicate  by check mark  whether  the  Registrant  is an  accelerated  filer (as
defined in Rule 12b-2 of the Act). Yes  X No____

Indicate the number of shares  outstanding  of each of the  Issuer's  classes of
common stock as of the latest practical date.

There were 12,923,424 shares outstanding of the Registrant's  common stock as of
July 31, 2005.


<PAGE>





                             STEEL TECHNOLOGIES INC.

                                      INDEX



                                                                     Page Number
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements (Unaudited)

        Condensed Consolidated Balance Sheets
        June 30, 2005 and September 30, 2004 ..............................  3

        Condensed Consolidated Statements of Income and
        Comprehensive Income Three and Nine Months Ended
        June 30, 2005 and 2004 ............................................  4

        Condensed Consolidated Statements of Cash Flows Nine Months
        Ended June 30, 2005 and 2004 ......................................  5

        Notes to Condensed Consolidated Financial Statements .............. 6-11

Item 2. Management's Discussion and Analysis of Financial Condition and
        Results of Operations .............................................12-22

Item 3. Quantitative and Qualitative Disclosures About Market
        Risk .............................................................. 22

Item 4. Controls and Procedures ........................................... 22

PART II.OTHER INFORMATION

Item 6. Exhibits .......................................................... 23

Signature ................................................................. 23



<PAGE>

                         Part I. - FINANCIAL INFORMATION
                          Item 1. Financial Statements

                             STEEL TECHNOLOGIES INC.
                      Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
(In thousands, except shares)                            June 30    September 30
(Unaudited)                                               2005           2004
--------------------------------------------------------------------------------
 <S>                                                   <C>             <C>
ASSETS
Current assets:
   Cash and cash equivalents ...................      $  17,878       $   2,273
   Trade accounts receivable, net ..............        113,417         123,546
   Inventories .................................        155,327         178,490
   Deferred income taxes .......................          2,507           2,471
   Prepaid expenses and other assets ...........          5,313           5,629
                                                      ---------       ---------
      Total current assets .....................        294,442         312,409

Property, plant and equipment, net .............        112,060         108,593
Investments in and advances to unconsolidated
   affiliates ..................................         24,242          22,312
Goodwill .......................................         18,148          18,148
Other assets ...................................          2,583           1,544
                                                      ---------       ---------
                                                      $ 451,475       $ 463,006
                                                      =========       =========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
   Accounts payable ............................      $  44,803       $  90,859
   Accrued liabilities .........................         15,505          14,901
   Income taxes payable ........................          2,269           6,278
                                                      ---------       ---------
      Total current liabilities ................         62,577         112,038

Long-term debt .................................        117,000         114,000
Deferred income taxes ..........................         17,289          18,295
Other long-term liabilities.....................          1,329             424
                                                      ---------       ---------
      Total liabilities ........................        198,195         244,757
                                                      ---------       ---------
Commitments and contingencies

 Shareholders' equity:
   Preferred stock, no par value: 500,000 shares
    authorized; none issued or outstanding.....            -               -
   Common stock, no par value: 50,000,000 shares
    authorized; issued and outstanding shares:
    12,922,050 at June 30, 2005 and
    12,804,073 at September 30, 2004............         70,586          69,466
   Treasury stock at cost:  2,634,716 shares at
    June 30, 2005 and 2,626,742 at September
    30, 2004....................................        (24,465)        (24,238)
   Additional paid-in capital ..................          5,214           5,170
   Retained earnings ...........................        206,345         174,025
   Accumulated other comprehensive loss ........         (4,400)         (6,174)
                                                      ---------       ---------
      Total shareholders' equity ...............        253,280         218,249
                                                      ---------       ---------
                                                      $ 451,475       $ 463,006
                                                      =========       =========
</TABLE>


   The accompanying notes are an integral part of the condensed consolidated
                             financial statements.
                                       3
<PAGE>

                             STEEL TECHNOLOGIES INC.
                   Condensed Consolidated Statements of Income
<TABLE>
<CAPTION>
(In thousands, except per share data)   For The Three Months Ended   For The Nine Months Ended
(Unaudited)                                    June 30                         June 30
----------------------------------------------------------------------------------------------
                                           2005        2004            2005         2004
                                      --------------------------------------------------------
<S>                                      <C>          <C>             <C>          <C>
Sales ................................   $256,432     $232,041        $797,406    $547,672
Cost of goods sold ...................    237,600      205,632         714,438     490,910
                                         --------     --------        --------    --------
      Gross profit ...................     18,832       26,409          82,968      56,762

Selling, general and
   administrative expenses ...........      9,699        9,284          29,444      24,374
Equity in net income of unconsolidated
   affiliates ........................        780          764           3,997       1,933
                                         --------     --------        --------     -------
   Operating income ..................      9,913       17,889          57,521      34,321

Interest expense, net ................      1,173        1,034           3,682       3,093
(Gain) loss on disposals/writeoffs of
   property, plant and equipment .....         (7)           8             (25)         20
                                         --------     --------         --------     -------
   Income before income taxes ........      8,747       16,847          53,864      31,208

Provision for income taxes ...........      3,076        6,310          18,322      11,371
                                         --------     --------        --------     -------
    Net income .......................   $  5,671     $ 10,537        $ 35,542     $19,837
                                         --------     --------        --------     -------
Diluted weighted average number of
   common shares outstanding .........     13,093       13,029          13,095      11,031
                                         ========     ========        ========     =======

Diluted earnings per common share ....   $   0.43     $   0.81        $   2.71     $  1.80
                                         ========     ========        ========     =======

Basic weighted average number of
   common shares outstanding .........     12,922       12,743          12,884      10,782
                                         ========     ========        ========     =======

Basic earnings per common share ......   $   0.44     $   0.83        $   2.76     $  1.84
                                         ========     ========        ========     =======

Cash dividends per common share ......   $   0.15      $  0.10        $   0.25     $  0.20
                                         ========     ========        ========     =======
</TABLE>


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

(In thousands)                          For The Three Months Ended   For The Nine Months Ended
(Unaudited)                                    June 30                         June 30
----------------------------------------------------------------------------------------------
                                           2005        2004            2005         2004
                                      --------------------------------------------------------
<S>                                       <C>        <C>            <C>           <C>
Net income ...........................   $  5,671     $ 10,537       $  35,542     $ 19,837
  Foreign currency translation
        adjustment ...................        876         (716)          1,906         (885)
  Change in unrealized loss on cash
        flow hedges, net of taxes ....       (132)          -             (132)         159
                                         --------     --------        --------     --------
Comprehensive income .................   $  6,415      $ 9,821        $ 37,316     $ 19,111
                                         ========     ========        ========     ========
</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
--------------------------------------------------------------------------------
                                                             2005       2004
                                                           ---------------------
<S>                                                       <C>         <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income .........................................   $ 35,542    $ 19,837
   Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
       Depreciation ...................................     11,341      11,197
       Deferred income taxes ..........................     (1,258)        681
       Equity in net income of unconsolidated
        affiliates ....................................     (3,997)     (1,933)
       (Gain) loss on disposals/writeoffs of property,
        plant and equipment ...........................        (25)         20
       Increase (decrease) in cash resulting from
         changes in:
             Trade accounts receivable ................     11,220     (44,101)
             Inventories ..............................     24,248     (54,839)
             Prepaids expenses and other assets .......       (445)        (19)
             Accounts payable .........................    (46,695)     25,710
             Accrued liabilities and income taxes .....     (3,116)      9,622
                                                          --------    --------
Net cash provided by (used in) operating activities ...     26,815     (33,825)
                                                          --------    --------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property, plant and equipment .........    (14,885)    (12,948)
   Proceeds from sale of property, plant and equipment         601         -
   Distribution from unconsolidated affiliate .........        -            59
   Repayment of advance to unconsolidated affiliate ...      2,000         -
                                                          --------    --------
Net cash used in investing activities .................    (12,284)    (12,889)
                                                          --------    --------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Proceeds from long-term debt .......................     88,000      65,000
   Principal payments on long-term debt ...............    (85,000)    (64,400)
   Cash dividends on common stock .....................     (3,222)     (2,254)
   Net issuance of common stock .......................        893      47,834
   Other ..............................................         -          175
                                                          --------    --------
Net cash provided by financing activities .............        671      46,355
                                                          --------    --------
Effect of exchange rate changes on cash ...............        403           6
                                                          --------    --------
Net increase in cash and cash equivalents .............     15,605        (353)
Cash and cash equivalents, beginning of year ..........      2,273       2,758
                                                          --------    --------
Cash and cash equivalents, end of period ..............   $ 17,878    $  2,405
                                                          ========    ========
Supplemental Cash Flow Disclosures:
Cash payment for interest .............................   $  3,544    $  3,184
                                                          ========    ========
Cash payment for income taxes .........................   $ 23,174    $  5,601
                                                          ========    ========


</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, 2005 and the condensed
consolidated  statements  of income and  comprehensive  income for the three and
nine months ended June 30, 2005 and 2004, and condensed  consolidated cash flows
for the nine months  ended June 30, 2005 and 2004,  have been  prepared by Steel
Technologies Inc. (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 as
of and for the three and nine  months  ended June 30,  2005 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
consolidated  financial  statements  be read in  conjunction  with the financial
statements  and notes thereto  included in the  Company's  Annual Report on Form
10-K for the fiscal year ended September 30, 2004. The results of operations for
the three and nine months ended June 30, 2005 are not necessarily  indicative of
the operating results for the full year.



2.  INVENTORIES:

<TABLE>
<CAPTION>
Inventories consists of:


(In thousands)                                         June 30     September 30
(Unaudited))                                            2005           2004
-------------------------------------------------------------------------------
<S>                                                 <C>           <C>
Raw materials ....................................   $  115,100   $  132,570
Finished goods and work in process ...............       40,227       45,920
                                                     ----------   ----------
                                                     $  155,327   $  178,490
                                                     ==========   ==========
</TABLE>


3.  STOCK OPTIONS

At June 30,  2005,  the Company  had  stock-based  compensation  plans which are
described more fully in Note 14 of Notes to Consolidated Financial Statements in
our Annual Report on Form 10-K for the fiscal year ended  September 30, 2004. As
permitted  by  Statement  of  Financial  Accounting  Standards  (SFAS)  No.  123
"Accounting  for  Stock-Based   Compensation"  and  amended  by  SFAS  No.  148,
"Accounting for Stock-Based Compensation Transition and Disclosure," the Company
follows  the  provisions  of  Accounting   Principles   Board  Opinion  No.  25,
"Accounting  for Stock  Issued to  Employees,"  and related  Interpretations  in
accounting  for its stock option plans under the  intrinsic  value based method.
Accordingly,  no stock-based  compensation expense has been recognized for stock
options issued under the plans as all stock options  granted under the plans had
an exercise  price at least equal to the market value of the  underlying  common
stock on the date of grant.  Had  compensation  expense been determined based on
the fair  value of the stock  options  at the  grant  date  consistent  with

                                       6

<PAGE>


the  provisions  of SFAS No. 123, the Company's net income and basic and diluted
net income per share would have been impacted as follows:


<table>
<caption>
(In thousands except per share data)       Three Months Ended  Nine Months Ended
(Unaudited)                                      June 30           June 30
-------------------------------------------------------------------------------
                                               2005     2004     2005    2004
                                              ------   ------   ------  ------
<S>                                           <C>      <C>      <C>     <C>
Net income - as reported                     $ 5,671  $10,537  $35,542  $19,837
Total stock-based employee compensation
   expense determined under
   fair value method for all awards,
   net of taxes                                   54       81      164      249
                                             -------  -------  -------  -------
Net income - pro forma                       $ 5,617  $10,456  $35,378  $19,588
                                             =======  =======  =======  =======

Diluted net income per share - as reported    $ 0.43   $ 0.81   $ 2.71  $ 1.80
Diluted net income per share - pro forma      $ 0.43   $ 0.81   $ 2.70  $ 1.78
Basic net income per share - as reported      $ 0.44   $ 0.83   $ 2.76  $ 1.84
Basic net income per share - pro forma        $ 0.43   $ 0.82   $ 2.75  $ 1.82
</table>


4.  NET INCOME PER SHARE COMPUTATIONS:

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

(In thousands, except per share data)                       Three Months Ended
(Unaudited)                                                      June 30
--------------------------------------------------------------------------------
                                                             2005        2004
                                                          ----------------------
<S>                                                       <C>         <C>
Net income ............................................   $   5,671   $  10,537
                                                          ---------   ---------
Shares (denominator) used for diluted
   per share computations:
    Weighted average shares of common  stock
        outstanding ...................................      12,922      12,743
    Plus: dilutive effect of stock options ............         171         286
                                                          ---------   ---------
           Diluted weighted average shares ............   $  13,093   $  13,029
                                                          ---------   ---------
Shares (denominator) used for basic per
   share computations:
   Weighted average shares of common stock
       outstanding ....................................      12,922      12,743
                                                          ---------   ---------
Net income per share data:
    Diluted ...........................................   $    0.43   $    0.81
                                                          =========   =========
    Basic .............................................   $    0.44   $    0.83
                                                          =========   =========
</TABLE>

                                       7
<PAGE>

<TABLE>
<CAPTION>

(In thousands, except per share data)                        Nine Months Ended
(Unaudited)                                                       June 30
--------------------------------------------------------------------------------
                                                             2005        2004
                                                          ----------------------
<S>                                                       <C>         <C>
Net income ............................................   $  35,542   $  19,837
                                                          ---------   ---------
Shares (denominator) used for diluted
   per share computations:
    Weighted average shares of common  stock
        outstanding ...................................      12,884      10,782
    Plus: dilutive effect of stock options ............         211         249
                                                          ---------   ---------
           Diluted weighted average shares ............   $  13,095   $  11,031
                                                          ---------   ---------
Shares (denominator) used for basic per
   share computations:
   Weighted average shares of common stock
       outstanding ....................................      12,884      10,782
                                                          ---------   ---------
Net income per share data:
    Diluted ...........................................   $    2.71   $    1.80
                                                          =========   =========
    Basic .............................................   $    2.76   $    1.84
                                                          =========   =========
</TABLE>
All  outstanding  options  are  included  in  the  diluted  earnings  per  share
calculation above for the three and nine months ended June 30, 2005 and 2004.


5.  RELATED PARTIES

Summarized  condensed  income  statement  information  of  Mi-Tech  Steel,  Inc.
(Mi-Tech Steel), a fifty percent owned unconsolidated affiliate accounted for by
the equity method, follows:

<TABLE>
<CAPTION>
(In Thousands)          Three Months Ended            Nine Months Ended
(Unaudited)                  June 30                      June 30
-----------------      ---------------------      -----------------------
                         2005         2004          2005           2004
                         ----         ----          ----           ----

                    <c>          <c>           <c>            <c>
Sales                  $74,959      $54,591       $226,358       $145,704
Gross profit             4,954        4,118         20,170         10,868
Net income               1,418        1,386          7,571          3,412
</TABLE>

The Company has various  transactions  with Mi-Tech Steel.  Both the Company and
Mi-Tech  Steel buy and sell  products and services at  prevailing  market prices
from each other.  Beginning in February 2005, the Company incurred expenses from
Mi-Tech Steel for toll processing and storage services  provided at its Decatur,
Alabama facility at agreed upon rates. Prior to February 2005, Mi-Tech Steel was
reimbursed for operating costs incurred at its Decatur,  Alabama facility by its
owners.  Equity in the net income of Mi-Tech Steel and management fee income are
also  included in  operating  income of the Company.  A summary of  transactions
between the Company and  Mi-Tech  Steel  during the three and nine months  ended
June 30, 2005 and 2004 follows:


                                       8

<PAGE>

<TABLE>
<CAPTION>
(In Thousands)                     Three Months Ended          Nine Months Ended
(Unaudited)                              June 30                   June 30
-----------------                 ---------------------     --------------------
                                    2005         2004         2005        2004
                                    ----         ----         ----        ----

                                <c>          <c>         <c>         <c>
Sales to Mi-Tech Steel              $  961       $  848      $ 2,778    $ 2,046
Purchases from and expense
   reimbursements to Mi-Tech Steel     535          590        1,674      1,023
Interest income from Mi-Tech Steel      27           16           71         32
Equity in net income of
   Mi-Tech Steel                       709          693        3,785      1,706

</TABLE>


As a result of the transactions  above,  accounts  receivable from Mi-Tech Steel
was  $464,000  and  $612,000  as of  June  30,  2005  and  September  30,  2004,
respectively,  and accounts payable to Mi-Tech Steel was $180,000 and $1,285,000
as of June 30, 2005 and September 30, 2004, respectively.

On June 30,  2005,  Mi-Tech  Steel repaid the Company its  $2,000,000  loan plus
accrued interest of approximately $139,000.

During the three and nine months ended June 30, 2005, the Company recorded sales
of  $2,471,000  and  $14,697,000,  respectively,  for scrap  products  sold to a
company  owned by an officer and  director  of the Company  compared to sales of
$4,351,000 and $11,916,000, respectively, during the three and nine months ended
June  30,  2004.  Accounts  receivable  from  the  aforementioned  company  were
$1,285,000  and  $4,714,000  as  of  June  30,  2005  and  September  30,  2004,
respectively.  Management  reports these  transactions to the Audit Committee of
the Board of Directors as frequently as requested by the Committee, but at least
annually.  Most  recently,  in April  2005,  the Audit  Committee  reviewed  and
approved  these  transactions.  The Company has the ability to continue or cease
selling scrap steel to this company at any time.

6.       FINANCIAL INSTRUMENTS

In order to mitigate a portion of the market risk on its variable rate debt, the
Company  entered  into an interest  rate swap  contract  with a major  financial
institution on June 20, 2005. Under the terms of the contract,  which matures in
September  2008, the Company  receives a LIBOR based variable  interest rate and
pays a fixed  interest rate of 4.31% on a notional  amount of  $30,000,000.  The
variable  interest  rate paid on the contract is  determined  based on the three
month LIBOR rate,  which is consistent with the variable rate  determination  on
the underlying debt.

SFAS 133,  "Accounting  for Derivative  Instruments  and Hedging  Activities" as
amended,  establishes  accounting and reporting  standards  requiring that every
derivative  financial  instrument  be recorded on the balance  sheet at its fair
value.  SFAS No. 133 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,  if any, for which the
derivative is designated as a hedge.  Gains and losses for qualifying hedges can
be

                                       9

<PAGE>


deferred in accumulated  other  comprehensive  loss and recognized in the income
statement  along  with the  related  results of the  hedged  item.  SFAS No. 133
requires  that  the  Company  formally   document,   designate  and  assess  the
effectiveness  of such  transactions  in order to qualify  for hedge  accounting
treatment.

The Company  designated  its interest rate swap contract as a cash flow hedge of
anticipated  interest payments under its variable rate line of credit agreement.
Gains and losses on these swaps are recorded in accumulated other  comprehensive
loss and are  reclassified  into net  income  as  interest  expense,  net in the
periods in which the related variable interest is paid.

7.  IMPACT OF RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

In May 2005,  the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
154, "Accounting Changes and Error Corrections,  a replacement of APB No. 20 and
FASB Statement No. 3." SFAS No. 154 requires retrospective  application to prior
periods'  financial  statements of a voluntary  change in  accounting  principle
unless it is impractical.  APB Opinion No. 20 "Accounting  Changes,"  previously
required that most  voluntary  changes in accounting  principle be recognized by
including  in net income of the period of the  change the  cumulative  effect of
changing to the new  accounting  principle.  This statement is effective for our
Company as of October 1, 2006. The Company will apply the  requirements  of SFAS
No. 154 on any changes in accounting principle made on or after October 1, 2006.

On December 16, 2004,  the FASB issued SFAS No. 123(R),  "Share-Based  Payment,"
that addresses the accounting for share-based  payment  transactions in which an
enterprise  receives employee services in exchange for (a) equity instruments of
the  enterprise  or (b)  liabilities  that are  based  on the fair  value of the
enterprise's  equity  instruments or that may be settled by the issuance of such
equity  instruments.  SFAS No.  123(R)  eliminates  the  ability to account  for
share-based  compensation  transactions  using APB Opinion  No. 25 and  requires
instead that such transactions be accounted for using a fair-value-based method.
SFAS No.  123(R) is effective  for any annual  period  beginning  after June 15,
2005. The Company is currently analyzing the impact of SFAS No. 123(R).

In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of APB  Opinion  No.  29." SFAS No.  153 is based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair  value of the  assets  exchanged.  APB  Opinion  No.  29,  "Accounting  for
Nonmonetary  Transactions,"  provided  an  exception  to its  basic  measurement
principle  (fair value) for exchanges of similar  productive  assets.  Under APB
Opinion No. 29, an exchange of a productive asset for a similar productive asset
was  based on the  recorded  amount  of the  asset  relinquished.  SFAS No.  153
eliminates  this  exception  and  replaces it with an  exception of exchanges of
nonmonetary  assets that do not have commercial  substance.  SFAS No. 153 became
effective  for our  Company  as of July 1,  2005.  The  Company  will  apply the
requirements of SFAS No. 153 on any future nonmonetary exchange transactions.


                                       10
<PAGE>

In November 2004, the FASB issued SFAS No. 151,  "Inventory Costs - an Amendment
of ARB No.  43." SFAS No.  151  amends the  guidance  in ARB No. 43,  Chapter 4,
"Inventory  Pricing," to clarify the  accounting  for  abnormal  amounts of idle
facility expense, freight, handling costs, and spoilage, and requires that these
items be recognized as  current-period  charges  regardless of whether they meet
the  criterion  of "so  abnormal."  In  addition,  SFAS No.  151  requires  that
allocation of fixed production  overheads to the costs of conversion be based on
the normal capacity of the production facilities. The provisions of SFAS No. 151
are effective for inventory  costs incurred  during fiscal years beginning after
June 15, 2005, with earlier application  permitted.  The Company does not expect
the  adoption  of SFAS No.  151 will have a  material  impact  on our  financial
position, results of operations or cash flows.

On October 22, 2004 the  American  Jobs  Creation  Act of 2004 was passed and is
effective  for our fiscal year ended  September  30,  2006.  This law provides a
phased  in  deduction  for  a  percentage  of  qualified  income  from  domestic
production  activities and a special  one-time tax deduction on the repatriation
of foreign  earnings.  The Company  will assess the impact of this change in tax
law as further authoritative guidance becomes available



                                       11
<PAGE>


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

When  used  in  the  following  discussion,   the  words  "expects,"  "intends,"
"anticipates," "believes" 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,  competitive  factors
such as pricing and  availability  of steel;  cyclicality of demand in the steel
industry,  specifically  in the  automotive  market;  our  ability  to make  and
integrate acquisitions;  our inability to obtain sufficient capital resources to
fund our operations  and our growth;  risk of business  interruptions  affecting
automotive manufacturers;  and reliance on key customers.  Readers are cautioned
not to place undue  reliance on these  forward-looking  statements,  which speak
only as of the date  hereof.  We undertake no  obligation  to republish  revised
forward-looking  statements to reflect the occurrence of unanticipated events or
circumstances  after the date  hereof.  Unless the context  otherwise  requires,
references to "we," "us" or "our" refer  collectively to Steel Technologies Inc.
and its subsidiaries.

Application of Critical Accounting Policies
-------------------------------------------

Our condensed consolidated financial statements have been prepared in accordance
with  generally  accepted  accounting  principles.   The  preparation  of  these
financial  statements requires management to make estimates and assumptions that
affect the amounts  reported in the financial  statements.  Actual results could
differ from these  estimates under  different  assumptions or conditions.  On an
ongoing basis, we monitor and evaluate our estimates and assumptions.

A summary of  significant  accounting  policies used in the  preparation  of the
consolidated   financial   statements  is  described  in  Note  1  of  Notes  to
Consolidated  Financial  Statements  in our  Annual  Report on Form 10-K for the
fiscal year ended September 30, 2004.

Our  most  critical  accounting  policies  include  the  valuation  of  accounts
receivable,  which impacts selling,  general and administrative expense, and the
assessment  of  recoverability  of goodwill and  long-lived  assets.  Management
reviews the estimates, including, but not limited to, the allowance for doubtful
accounts  on  a  regular  basis  and  makes   adjustments  based  on  historical
experiences,  current  conditions  and  future  expectations.  The  reviews  are
performed  regularly and adjustments are made as required by currently available
information. We believe these estimates are reasonable, but actual results could
differ from these estimates.

     Allowance for Doubtful Accounts Receivable
     ------------------------------------------

     Our accounts  receivable  represent  those amounts that have been billed to
     our customers but not yet collected.  An allowance for doubtful accounts is
     maintained  for  estimated  losses  resulting  from  the  inability  of our
     customers to make required payments. The allowance is maintained at a level
     considered  appropriate  based on historical  and other factors that affect
     collectibility. The factors include historical trends of write-offs, sales,
     recoveries and credit losses,  the monitoring of portfolio  credit quality,
     and current and

                                       12

<PAGE>


     projected economic and market conditions. If the financial condition of our
     customers were to deteriorate, resulting in an impairment of the ability to
     make payments beyond previously  established terms,  additional  allowances
     may be required.  Uncollectible accounts receivable are written off against
     the allowance for doubtful accounts  receivable when management  determines
     that the  probability  of payment is remote and  collections  efforts  have
     ceased.

     Long-Lived Assets
     -----------------

     Long-lived  assets with  estimated  useful lives are  depreciated  to their
     residual values over those useful lives in proportion to the economic value
     consumed.  We  review  the  carrying  value of our  long-lived  assets  for
     impairment  whenever changes in events and circumstances  indicate that the
     carrying amount of the assets may not be recoverable. If an evaluation were
     required,  the estimated future  undiscounted cash flows associated with an
     asset would be compared to the asset's  carrying  value to  determine  if a
     write-down  to market value or  undiscounted  cash flows value is required.
     Future changes in circumstances,  cash flow estimates and estimates of fair
     value could affect the valuations.

     Goodwill is reviewed annually, or sooner if indicators of impairment exist,
     for impairment using the present value technique to determine the estimated
     fair  value of  goodwill  associated  with each  reporting  entity.  If the
     goodwill is indicated as being  impaired  (the present  value of cash flows
     (fair value) of the reporting unit is less than the carrying  amount),  the
     fair value of the reporting  unit would then be allocated to our assets and
     liabilities in a manner  similar to the purchase price  allocation in order
     to determine the implied fair value of the reporting  unit  goodwill.  This
     implied fair value of the reporting  unit  goodwill  would then be compared
     with the carrying  amount of the  reporting  unit  goodwill and, if it were
     less, we would then recognize an impairment loss.

     Considerable  management  judgment is  necessary to assess  impairment  and
     estimate fair value.  The  projection of future cash flows for the goodwill
     impairment  analysis  requires  significant  judgment  and  estimates  with
     respect to future  revenues  related  to the  assets  and the  future  cash
     outlays related to those  revenues.  Actual revenues and related cash flows
     or changes in  anticipated  revenues and related cash flows could result in
     changes  in  the  assessment  and  result  in  an  impairment  charge.  The
     assumptions used in our evaluations,  such as forecasted growth rates, cost
     of capital,  tax rates and residual values are consistent with our internal
     projections  and  operating  plans.  The  use  of  different   assumptions,
     including  cash flows and discount  rates,  could  increase or decrease the
     related impairment charge.

Overview
--------

We are one of the largest  independent  flat-rolled  steel  processors  in North
America.   Our  North  American   platform  of  20  facilities,   including  our
unconsolidated  affiliates,  is strategically  positioned in the steel producing
and consuming markets throughout the United States and Mexico. We bring value to
our  customers  through  precision  steel  processing  as well as  supply  chain
management,  quality control and technical support. We utilize the most advanced
equipment to produce high-quality steel products and specialize in meeting exact
specifications  for  customers  in a variety of  industries  and end use markets
including automotive,  lawn and garden,  appliance and rail car industries.  Our
broad geographic

                                       13
<PAGE>


coverage  allows us to provide  precision  steel  products to our customers with
efficient just-in-time delivery.

We focus our sales and  marketing  strategies  to more fully  leverage our North
American platform of value added steel processing  facilities.  In recent years,
we have been  successful  in growing our volume across all  operations  and have
gained meaningful  market growth,  both with existing and new customers across a
wide range of end use markets.  Our broad  capabilities and geographic  presence
offers  distinct  competitive  advantages  to  customers  that have  multi-plant
operations  throughout the United States, Canada and Mexico. This has allowed us
to expand with regional and large national accounts.

For the three months ended June 30, 2005, sales increased 11% to a record $256.4
million  from $232.0  million in the same period a year ago.  Net income for the
third  quarter was $5.7  million or $0.43 per diluted  share  compared  with net
income of $10.5 million or $0.81 per diluted share in the same period a year.

For the first nine months of fiscal 2005 sales  increased 46% to a record $797.4
million and year to date net income increased to a record $35.5 million or $2.71
per diluted  share from $19.8  million or $1.80 per  diluted  share in the first
nine months of fiscal 2004, on  approximately  19% more weighted average diluted
shares outstanding. Results for the first nine months of fiscal 2005 included an
income  tax  benefit of  approximately  $0.06 per  diluted  share as a result of
changes in tax laws effective January 1, 2005 for our Mexican operations.

Our largest unconsolidated affiliate,  Mi-Tech Steel, continues to contribute to
our overall success and is benefiting from strong Japanese transplant automotive
production  growth.  Mi-Tech Steel plays an important role in our North American
platform and is included in our  marketing  strategies as we expand our position
with large  national  customers.  Mi-Tech Steel reported 37% growth in sales and
25% growth in tons shipped in the third  quarter of fiscal 2005  compared to the
third quarter of fiscal 2004.

Tons sold of  company-owned  steel  products in our third quarter of fiscal 2005
were  297,000,  reflecting a decrease of 16% over the record levels of our third
quarter of fiscal 2004.  Shipments  during the third quarter of fiscal 2004 were
positively  impacted by greater demand during a tight steel environment.  During
the third  quarter of fiscal  2005,  we began  experiencing  a period of slowing
demand  and a  declining  price  environment  resulting  in a  decrease  in  our
operating  margins.  We  anticipate  these  issues  will  continue to impact our
shipment  levels and  operating  margins until  pricing  stabilizes  and volumes
increase  which we expect near the end of our fourth  quarter of fiscal 2005. We
estimate that our tons sold and average  selling price for the fourth quarter of
fiscal 2005 will  decrease  approximately  10% from the third  quarter of fiscal
2005 levels.  To mitigate the  short-term  impact of declining  prices,  we have
aggressively  reduced our  inventory  levels  during the third quarter of fiscal
2005.

As our working  capital  needs  decline  during this  current  cycle of economic
contraction,  we expect to reduce  borrowings on our unsecured  credit  facility
from $67  million  to $40  million  by  September  30,  2005.  We are  currently
investing $17 million on capital  projects in 2005 to further  expand  capacity,
lower conversion costs,  improve our quality and service to our customers and to
enhance our information systems.

                                       14
<PAGE>

    Financial Highlights (in thousands except per share data and percentages)
    -------------------------------------------------------------------------

<table>
<caption>


                                   For the Three Months Ended June 30
                                         2005               2004
                                   ---------------  ------------------
                                            % of              % of         %
(Unaudited)                        Actual   Sales    Actual   Sales      Change
--------------------------------- -------- -------  -------- --------- --------

                              <c>       <c>      <c>       <c>         <c>
Sales                            $256,432  100.0%   $232,041  100.0%      11%
Gross profit                       18,832    7.3      26,409   11.4      (29)
Selling, general and
   administrative expenses          9,699    3.8       9,284    4.0        5
Equity in net income of
   unconsolidated affiliates          780    0.3         764    0.3        2
Operating income                    9,913    3.9      17,889    7.7      (45)
Interest expense, net               1,173    0.5       1,034    0.5       13
Net income                          5,671    2.2      10,537    4.5      (46)
Diluted earnings per common share   $0.43              $0.81             (47)
Cash dividends per common share     $0.15              $0.10              50

Other data
----------
Average days sales outstanding      39.8               45.8              (13)
Inventory turnover                   6.1                5.9                3
Return on equity (annualized)        9.0%              20.8%             (57)

</table>


 <table>
<caption>


                                    For the Nine Months Ended June 30
                                         2005              2004
                                   ---------------  ------------------
                                            % of              % of         %
(Unaudited)                        Actual   Sales    Actual   Sales      Change
--------------------------------- -------- -------  -------- --------- --------

                              <c>       <c>      <c>       <c>         <c>
Sales                            $797,406  100.0%   $547,672  100.0%      46%
Gross profit                       82,968   10.4      56,762   10.4       46
Selling, general and
   administrative expenses         29,444    3.7      24,374    4.5       21
Equity in net income of
   unconsolidated affiliates        3,997    0.5       1,933    0.4      107
Operating income                   57,521    7.2      34,321    6.3       68
Interest expense, net               3,682    0.5       3,093    0.6       19
Net income                         35,542    4.5      19,837    3.6       79
Diluted earnings per common share   $2.71              $1.80              51
Cash dividends per common share     $0.25              $0.20              25


Other data
----------
Average days sales outstanding      38.4               58.2              (34)
Inventory turnover                   6.1                4.7               30
Return on equity (annualized)       18.7%              13.1%              43


</TABLE>

                                       15
<PAGE>

Results of Operations
---------------------

     Sales
     -----

     We posted net sales of  $256,432,000  for the third  quarter ended June 30,
     2005,  an increase of 11% from sales of  $232,041,000  for the third fiscal
     quarter ended June 30, 2004. Tons shipped of  company-owned  steel products
     in the third quarter of fiscal 2005 decreased  approximately 16% to 297,000
     tons compared to the third quarter of fiscal 2004 reflecting slower demand.
     Record shipments last year were positively  impacted by greater demand in a
     tight steel environment.  The average selling price of company-owned  steel
     products  increased  approximately 33% for the third quarter of fiscal 2005
     as compared to the third quarter of fiscal 2004.

     Sales  for  the  nine  months  ended  June  30,  2005  increased  by 46% to
     $797,406,000  compared to  $547,672,000  for the nine months ended June 30,
     2004.  Tons  shipped in the first nine months of fiscal 2005  decreased  2%
     compared to the first nine months of fiscal 2004. Average selling prices of
     steel for the first nine months of fiscal 2005 increased  approximately 49%
     compared to fiscal 2004.


     Gross profit
     ------------

     Our gross  profit  margin  was 7.3% in the  third  quarter  of fiscal  2005
     compared to 11.4% in the third  quarter of fiscal 2004.  Cost of goods sold
     increased  15.6% in the third  quarter of fiscal 2005 compared to the third
     quarter of fiscal 2004. Cost of materials sold increased $32,954,000 in the
     third quarter of fiscal 2005 primarily due to increased raw material costs.
     The  remaining  cost of goods  sold in the third  quarter  of  fiscal  2005
     decreased  by $986,000  and was  primarily a result of  decreased  delivery
     costs on lower shipment levels.

     For the first nine months of fiscal  2005 and fiscal 2004 our gross  profit
     margin was  10.4%.  Cost of goods  sold  increased  45.5% in the first nine
     months of fiscal 2005  compared  to the first nine  months of fiscal  2004.
     Cost of materials sold increased  $219,592,000  primarily due to higher raw
     material costs.  The remaining  increase in cost of goods sold for the nine
     months  ended June 30, 2005  compared to June 30,  2004 of  $3,936,000  was
     primarily a result of increased  labor costs,  related fringe  benefits and
     increased delivery costs primarily in the first half of fiscal 2005.

     Our gross profit  margin  decreased to 7.3% in the third  quarter of fiscal
     2005 from 11.0% in the second  quarter of fiscal 2005 primarily as a result
     of slower  economic  demand,  reduced  selling  prices and lower  levels of
     operations.  We expect our  selling  prices  during  the fourth  quarter of
     fiscal 2005 will  continue to be reduced by a greater  percentage  than our
     reduction  in cost of  materials.  Accordingly,  we expect our gross profit
     margin will  decline in our fourth  quarter of fiscal 2005  compared to our
     third  quarter of fiscal 2005.  We may offset lower gross profit  trends by
     achieving production cost efficiencies and product mix improvements.

                                       16
<PAGE>


     Selling, general and administrative expenses
     --------------------------------------------

     Selling,  general and  administrative  costs were  $9,699,000 for the three
     months ended June 30,  2005,  compared to  $9,284,000  for the three months
     ended June 30, 2004. The increase is primarily attributable to increases in
     professional fees of $496,000 to comply with Sarbanes-Oxley legislation, an
     increase in bad debt expense of $389,000  resulting from higher sales and a
     weaker  economy,  increases  in  selling  and  administrative  expenses  of
     approximately  $341,000  and an increase of $177,000 in  remaining  general
     expenses.  These  increases  were  offset by a  decrease  of  approximately
     $988,000  in  company  wide bonus  plan  expenses  that are tied to company
     profits.

     Selling,  general and  administrative  costs were  $29,444,000 for the nine
     months ended June 30,  2005,  compared to  $24,374,000  for the nine months
     ended June 30, 2004. The increase is primarily  attributable to an increase
     in  company  wide  bonus  plan   expenses   tied  to  company   profits  of
     approximately  $1,752,000,   higher  selling,   administrative  and  travel
     expenses of  approximately  $1,084,000,  increases in professional  fees of
     $508,000 to comply with  Sarbanes-Oxley  legislation and an increase in bad
     debt expense of $140,000  resulting from higher sales and a weaker economy.
     Selling, general and administrative expenses for fiscal 2004 benefited from
     a reduction of property tax expenses of approximately  $385,000 as a result
     of receiving an assessment at amounts  significantly  lower than  estimated
     and a non-recurring state payroll tax incentive credit of $355,000 received
     during the  second  quarter  of fiscal  2004.  The  remaining  increase  of
     $846,000 primarily relates to general expenses

     We  continue  to actively  manage the level at which  selling,  general and
     administrative expenses are added to our cost structure.


     Equity in net income of unconsolidated affiliates
     -------------------------------------------------

     Our share of the income of our  unconsolidated  affiliates was $780,000 for
     the third quarter of fiscal 2005 compared to $764,000 in 2004. For the nine
     months  ended June 30,  2005  income  from  unconsolidated  affiliates  was
     $3,997,000  compared to $1,933,000 for the first nine months ended June 30,
     2004.

     Our largest unconsolidated affiliate,  Mi-Tech Steel, experienced 37% sales
     growth during the third quarter of fiscal 2005 and 55% sales growth for the
     first nine months of fiscal 2004.  Mi-Tech Steel  continues to benefit from
     strong Japanese transplant and domestic market growth.  Mi-Tech Steel plays
     an  important  role in our North  American  platform  and  continues  to be
     awarded additional programs with Japanese transplant automotive companies.


     Interest expense
     ----------------

     Net  interest  expense for the third  quarter of fiscal 2005  increased  to
     $1,173,000  from  $1,034,000  for the third  quarter  of fiscal  2004.  Net
     interest  expense for the nine  months  ended June 30,  2005  increased  to
     $3,682,000  compared to  $3,093,000  during the same period of fiscal 2004.
     The increase is primarily attributable to higher interest rates on variable
     rate debt. In addition, during the first quarter of fiscal 2005 we replaced
     variable  rate debt with fixed rate debt at higher  rates  compared  to the
     same period last year.

                                       17
<PAGE>


     Income tax expense
     ------------------

     Our  effective  income  tax  rate  was   approximately   35.2%  and  37.5%,
     respectively,  for the third quarters of fiscal 2005 and 2004. The decrease
     between years is primarily  attributable to a decline in Mexico's statutory
     income tax rate from 33% to 30% on January 1, 2005.

     For the first nine months of fiscal 2005 and 2004 our effective  income tax
     rate  was  34.0%  and  36.4%,  respectively.   The  decrease  is  primarily
     attributable to an income tax benefit of  approximately  $830,000  recorded
     during the second  quarter  of fiscal  2005 to reflect  changes in tax laws
     effective  January 1, 2005 for our  Mexican  operations.  We  estimate  our
     effective income tax rate will be approximately 34% for fiscal 2005.


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

As of June 30,  2005,  we had  $231,865,000  of working  capital,  maintained  a
current ratio of 4.7:1 and had total debt at 32% of  capitalization.  Generally,
in periods of economic  expansion  and increased  demand for our  products,  our
working  capital  requirements  increase.  Conversely,  in periods  of  economic
contraction   and  reduced  demand  for  our  products,   our  working   capital
requirements decrease.

Average days sales outstanding to customers was 40 days as of June 30, 2005 from
favorable  collection  results  compared  to 46 as of June 30,  2004.  We expect
average days sales outstanding to return to a more normal trend of approximately
45 days during the fourth quarter of fiscal 2005.  Average days inventory was 59
days as of June 30, 2005  compared to 61 days as of June 30,  2004.  To mitigate
the short-term impact of declining prices, we aggressively reduced our inventory
levels  during  the third  quarter of fiscal  2005.  We expect to return to more
normal inventory levels during the fourth quarter of fiscal 2005.

Our average  payment days to suppliers  was 17 days as of June 30, 2005 compared
to 33 days as of June 30, 2004. We expect  average  payment days to suppliers to
increase  to more  normal  levels of  approximately  30 days  during  the fourth
quarter of fiscal 2005.

During the first nine months of fiscal 2005,  cash  provided by  operations  was
$26,815,000  primarily  from net income  offset by  changes  in working  capital
compared to cash used in operations of  $33,825,000,  primarily  working capital
related, during the first nine months of fiscal 2004.

During  the  first  nine  months of  fiscal  2005,  we  decreased  inventory  by
$24,248,000.   We  experienced  improved  collections  that  decreased  accounts
receivable by $11,220,000.  These items  contributed to operating cash flows and
were  offset  by  decreases  in  accounts  payable  of  $46,695,000  related  to
decreasing our inventory purchases and meeting our obligations to suppliers.

During  the  first  nine  months of  fiscal  2004,  we  increased  inventory  by
$54,839,000 and accounts  receivable by $44,101,000 to support our sales growth,
which was partially offset by an increase in accounts payable of $25,710,000.

                                       18
<PAGE>

Capital   expenditures  for  the  first  nine  months  of  fiscal  2005  totaled
approximately  $14,885,000.  We continue to expand production  capacity to serve
the growing needs of customers,  improve  information systems as well as quality
and service to our customer and invest in automation to improve productivity and
make our operations  more efficient.  For fiscal 2005, the capital  additions to
all facilities are expected to approximate $17,000,000.

We  maintain  an equity  investment  of  $25,744,000  in our  90%-owned  Mexican
subsidiary. Additional investments in our Mexican operations, if required, would
be financed with available funds from our credit facility.

The translation of the financial statements of our Mexican subsidiary from local
currencies to the U.S.  dollar  subjects us to exposure  relating to fluctuating
exchange  rates.  However,  this  exposure  is  mitigated  somewhat  by a  large
percentage of transactions  denominated in the U.S.  dollar.  We do not consider
our exposure to exchange rate risks to be material and consider the Mexican peso
a relatively  stable  currency.  We do not typically  manage our related foreign
currency  exchange rate risk through the use of financial  instruments.  Foreign
currency  transaction losses included in sales were $486,000 and $883,000 during
the three and nine  months  ended  June 30,  2005,  respectively,  reflecting  a
stronger average exchange rate of the peso relative to the U.S. dollar.  Foreign
currency transaction gains included in sales for the three and nine months ended
June 30, 2004 were $382,000 and $461,000, respectively.

We maintain a 50% equity investment in Mi-Tech Steel and a 49% equity investment
in  Ferrolux  Metals.  Additional  equity  contributions  to our  unconsolidated
affiliates  are not  required and we do not  guarantee  any  obligations  of our
unconsolidated affiliates. While distributions from Mi-Tech Steel are permitted,
if authorized by Mi-Tech  Steel's board of  directors,  such  distributions  are
restricted by one of Mi-Tech Steel's loan agreements.  Such  restrictions  limit
distributions  to 15%  of  Mi-Tech  Steel's  net  income  in  any  fiscal  year.
Distributions  from Mi-Tech Steel are not, and are not expected to be,  material
sources of liquidity for us. Mi-Tech  Steel's  liquidity needs are met primarily
by their  cash flows  from  operating  activities  and  existing  line of credit
facility  and  shareholder  loans.  Cash flows  from  operations  and  available
borrowing  capabilities  are expected to meet Mi-Tech  Steel's future needs.  On
June 30, 2005, Mi-Tech Steel repaid us its $2,000,000 loan plus accrued interest
of approximately $139,000.

On October 21, 2004, we issued  $50,000,000 in unsecured senior notes which have
an average term of 9.4 years and a blended interest rate of 5.67%. The notes are
comprised of $10,000,000 of 5.33% Series A Senior Notes due October 21, 2011 and
$40,000,000  of 5.75% Series B Senior  Notes due October 21, 2014.  The proceeds
from the notes were used to reduce borrowings  outstanding on our revolving line
of credit facility.

Borrowings  and repayments  under our line of credit  agreement are initiated as
needed to fund our operating and investing  activities  described above.  During
the first nine months of fiscal  2005,  we borrowed  $88,000,000  to finance our
working capital needs and paid $85,000,000 on our bank line of credit, including
the proceeds from the $50,000,000 unsecured senior notes.

We  have  a  $135,000,000  unsecured  revolving  credit  facility  that  matures
September 2009. Our existing  banking group can elect to expand the availability
to  $200,000,000  at our request

                                       19
<PAGE>

under  certain  circumstances.  Interest on the  facility  is paid with  various
variable options on the interest rate, none of which are greater than the bank's
prime rate. At June 30, 2005,  there was  $67,000,000  outstanding on the credit
facility.

Provisions  contained in our debt  agreements  require us to maintain  specified
levels of net  worth,  maintain  certain  financial  ratios  and  limit  capital
expenditures,  operating  leases,  capital  leases and addition  debt. We are in
compliance with our loan  covenants,  and none of these covenants would restrict
the completion of currently planned capital expenditures.



Cash Requirements, Contractual Obligations and Contingencies
------------------------------------------------------------

Our  liquidity  needs  are  met  primarily  by our  cash  flows  from  operating
activities  and our line of credit  facility.  Operating cash flows are somewhat
influenced by  cyclicality  of demand in the steel  industry,  especially in the
automotive  market.  We  anticipate  borrowing  on our  existing  line of credit
facility to support our continued  growth and to meet our working capital needs.
Cash flows from operations and available borrowing  capabilities are expected to
meet our future needs.

During the third fiscal  quarter  ended June 30, 2005,  we paid our  semi-annual
cash dividend which increased 50% to $0.15 per share.

We have entered into  operating  leases to meet the needs of our  facilities and
agreements  to  purchase  electricity  to meet  the  needs of our  Ottawa,  Ohio
facility.  These obligations have not changed significantly from those disclosed
in our Annual  Report on Form 10-K for the year ended  September  30,  2004.  In
addition,  we entered into an  electricity  agreement  for our Canton,  Michigan
facility in March  2005.  This  agreement  expires in March 2013 and there is no
minimum energy consumption required during the term of the agreement.

In July 2005,  union  employees  in our  Canton,  Michigan  facility  ratified a
contract which expires in March 2010.

At this time, we have no other known material  off-balance  sheet  arrangements,
contractual obligations,  contingent liabilities or commitments that must be met
beyond the next twelve months.

We believe  all  manufacturing  facilities  are in  compliance  with  applicable
federal and state environmental  regulations.  We are not presently aware of any
fact or  circumstance,  which would require the expenditure of material  amounts
for environmental compliance.

Related Party Transactions
--------------------------

We have various transactions with Mi-Tech Steel and we sell scrap steel products
to a  company  owned  by  Stuart  N.  Ray,  an  officer  and  director  of Steel
Technologies  (see  Note 5 of our  Notes  to  Condensed  Consolidated  Financial
Statements). Management reports these transactions to the Audit Committee of the
Board of Directors as  frequently  as requested by the  Committee,  but at least
annually.  Most  recently,  in April  2005,  the Audit  Committee  reviewed  and
approved  these  transactions.  We have the ability to continue or cease selling
scrap steel to this company at any time.

                                       20

<PAGE>

Recently Issued Accounting Pronouncements
-----------------------------------------

In May 2005,  the Financial  Accounting  Standards  Board (FASB) issued SFAS No.
154, "Accounting Changes and Error Corrections,  a replacement of APB No. 20 and
FASB Statement No. 3." SFAS No. 154 requires retrospective  application to prior
periods'  financial  statements of a voluntary  change in  accounting  principle
unless it is impractical.  APB Opinion No. 20 "Accounting  Changes,"  previously
required that most  voluntary  changes in accounting  principle be recognized by
including  in net income of the period of the  change the  cumulative  effect of
changing to the new  accounting  principle.  This statement is effective for our
Company as of October 1, 2006. The Company will apply the  requirements  of SFAS
No. 154 on any changes in accounting principle made on or after October 1, 2006.

On December 16, 2004, the (FASB) issued SFAS No. 123(R),  "Share-Based Payment,"
that addresses the accounting for share-based  payment  transactions in which an
enterprise  receives employee services in exchange for (a) equity instruments of
the  enterprise  or (b)  liabilities  that are  based  on the fair  value of the
enterprise's  equity  instruments or that may be settled by the issuance of such
equity  instruments.  SFAS No.  123(R)  eliminates  the  ability to account  for
share-based  compensation  transactions  using APB Opinion  No. 25 and  requires
instead that such transactions be accounted for using a fair-value-based method.
SFAS No.  123(R) is effective  for any annual  period  beginning  after June 15,
2005. The Company is currently analyzing the impact of SFAS No. 123(R).

In  December  2004,  the FASB issued SFAS No.  153,  "Exchanges  of  Nonmonetary
Assets,  an  amendment  of APB  Opinion  No.  29." SFAS No.  153 is based on the
principle that  exchanges of nonmonetary  assets should be measured based on the
fair  value of the  assets  exchanged.  APB  Opinion  No.  29,  "Accounting  for
Nonmonetary  Transactions,"  provided  an  exception  to its  basic  measurement
principle  (fair value) for exchanges of similar  productive  assets.  Under APB
Opinion No. 29, an exchange of a productive asset for a similar productive asset
was  based on the  recorded  amount  of the  asset  relinquished.  SFAS No.  153
eliminates  this  exception  and  replaces it with an  exception of exchanges of
nonmonetary  assets that do not have commercial  substance.  SFAS No. 153 became
effective  for our  Company  as of July 1,  2005.  The  Company  will  apply the
requirements of SFAS No. 153 on any future nonmonetary exchange transactions.


In November 2004, the FASB issued SFAS No. 151,  "Inventory Costs - an Amendment
of ARB No.  43."  SFAS No. 151 amends  the  guidance  in ARB No. 43,  Chapter 4,
"Inventory  Pricing," to clarify the  accounting  for  abnormal  amounts of idle
facility expense, freight, handling costs, and spoilage, and requires that these
items be recognized as  current-period  charges  regardless of whether they meet
the  criterion  of "so  abnormal."  In  addition,  SFAS No.  151  requires  that
allocation of fixed production  overheads to the costs of conversion be based on
the normal  capacity of the production  facilities.   The provisions of SFAS No.
151 are effective for inventory  costs  incurred  during fiscal years  beginning
after June 15, 2005, with earlier application  permitted.   We do not expect the
adoption of SFAS No. 151 will have a material impact on our financial  position,
results of operations or cash flows.

On October 22, 2004,  the American  Jobs  Creation Act of 2004 was passed and is
effective  for our fiscal year ended  September  30,  2006.  This law provides a
phased  in  deduction  for  a  percentage  of  qualified  income  from  domestic
production  activities and a special  one-time tax

                                       21
<PAGE>

deduction on the repatriation of foreign earnings.  We will assess the impact of
this change in tax law as further authoritative guidance becomes available.


       Item 3. Quantitative and Qualitative Disclosures About Market Risk

In order to mitigate a portion of the market risk on its variable rate debt, the
Company  entered  into an interest  rate swap  contract  with a major  financial
institution on June 20, 2005. Under the terms of the contract,  which matures in
September  2008, the Company  receives a LIBOR based variable  interest rate and
pays a fixed  interest rate of 4.31% on a notional  amount of  $30,000,000.  The
variable  interest  rate paid on the contract is  determined  based on the three
month LIBOR rate,  which is consistent with the variable rate  determination  on
the underlying debt.

Except for the interest rate swap contract  entered into on June 20, 2005, there
has been no material  change during the nine months ended June 30, 2005 from the
disclosures about market risk provided in our Annual Report on Form 10-K for the
year ended September 30, 2004.

                         Item 4. Controls and Procedures

Management,  including our Chief Executive Officer and Chief Financial  Officer,
evaluated  the  effectiveness  of the design  and  operation  of our  disclosure
controls and  procedures  as of the end of the third fiscal  quarter  covered by
this  Quarterly  Report on Form  10-Q.  Based  upon that  evaluation,  our Chief
Executive  Officer and Chief  Financial  Officer  concluded  that the disclosure
controls  and  procedures  are  effective  to ensure that  material  information
required to be disclosed  in the reports we file or submit under the  Securities
Exchange Act of 1934 is made known to us by others within our company, including
our consolidated subsidiaries,  particularly during the period for which reports
of our company, including this Quarterly Report on Form 10-Q, are being prepared
and to permit our  company to report  that  information  within the time  period
specified to the  Securities and Exchange  Commission.

There were no changes in our internal  control  over  financial  reporting  that
occurred during our third fiscal quarter that have materially  affected,  or are
reasonably  likely to materially  affect,  our internal  control over  financial
reporting.

                                       22
<PAGE>



                        Part II - Other Information

                          Item 6. Exhibits

Exhibits filed or furnished with this report:

   Exhibit 31.1             Certification of Chief Executive  Officer Pursuant
                            to Section 302 of the Sarbanes-Oxley Act of 2002

   Exhibit 31.2             Certification of Chief Financial  Officer Pursuant
                            to Section 302 of the Sarbanes-Oxley Act of 2002

   Exhibit 32.1             Certification of Chief Executive  Officer  Pursuant
                            to Title 18, United States Code, Section 1350 as
                            adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002

   Exhibit 32.2             Certification of Chief Financial  Officer  Pursuant
                            to Title 18, United States Code, Section 1350 as
                            adopted pursuant to Section 906 of the
                            Sarbanes-Oxley Act of 2002




SIGNATURE

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      /s/ Joseph P. Bellino
        -----------------------------
        Joseph P. Bellino
        Chief Financial Officer
        (Principal Financial and Chief Accounting Officer)




Dated August 8, 2005

                                       23

<PAGE>
                                  EXHIBIT 31.1
                CHIEF EXECUTIVE OFFICER CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Bradford T. Ray, certify that:

1.   I have reviewed this  quarterly  report on Form 10-Q of Steel  Technologies
     Inc. for the fiscal quarter ended June 30, 2005;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          third fiscal quarter that has materially  affected,  or is reasonably
          likely to materially  affect,  the registrant's  internal control over
          financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.


Date: August 8, 2005

/s/ Bradford T. Ray
--------------------
Bradford T. Ray
Chief Executive Officer


<PAGE>

                                  EXHIBIT 31.2
                CHIEF FINANCIAL OFFICER CERTIFICATION PURSUANT TO
                  SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Joseph P. Bellino, certify that:

1.   I have reviewed this  quarterly  report on Form 10-Q of Steel  Technologies
     Inc. for the fiscal quarter ended June 30, 2005;

2.   Based on my knowledge, this report does not contain any untrue statement of
     a material  fact or omit to state a  material  fact  necessary  to make the
     statements made, in light of the circumstances  under which such statements
     were made,  not  misleading  with  respect  to the  period  covered by this
     report;

3.   Based on my  knowledge,  the  financial  statements,  and  other  financial
     information  included  in  this  report,  fairly  present  in all  material
     respects the financial  condition,  results of operations and cash flows of
     the registrant as of, and for, the periods presented in this report;

4.   The  registrant's  other  certifying  officer  and  I are  responsible  for
     establishing and maintaining disclosure controls and procedures (as defined
     in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the registrant and have:

     a)   Designed  such  disclosure  controls  and  procedures,  or caused such
          disclosure   controls  and   procedures  to  be  designed   under  our
          supervision,  to ensure  that  material  information  relating  to the
          registrant,  including its consolidated subsidiaries, is made known to
          us by others within those entities,  particularly during the period in
          which this report is being prepared;

     b)   Evaluated the  effectiveness of the registrant's  disclosure  controls
          and procedures and presented in this report our conclusions  about the
          effectiveness of the disclosure controls and procedures, as of the end
          of the period covered by this report based on such evaluation; and

     c)   Disclosed  in this  report  any  change in the  registrant's  internal
          control over financial reporting that occurred during the registrant's
          third fiscal quarter that has materially  affected,  or is reasonably
          likely to materially  affect,  the registrant's  internal control over
          financial reporting; and

5.   The registrant's  other certifying  officer and I have disclosed,  based on
     our most recent evaluation of internal control over financial reporting, to
     the registrant's  auditors and the audit committee of registrant's board of
     directors (or persons performing the equivalent functions):

     a)   All significant  deficiencies and material weaknesses in the design or
          operation  of internal  control  over  financial  reporting  which are
          reasonably  likely to  adversely  affect the  registrant's  ability to
          record, process, summarize and report financial information; and

     b)   Any fraud, whether or not material,  that involves management or other
          employees who have a  significant  role in the  registrant's  internal
          control over financial reporting.

Date: August 8, 2005

/s/ Joseph P. Bellino
---------------------
Joseph P. Bellino
Chief Financial Officer


<page>

                                  EXHIBIT 32.1


                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
             PURSUANT TO TITLE 18, UNITED STATES CODE, SECTION 1350
      AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Title 18, United States Code,  Section 1350, as adopted  pursuant to
Section  906 of the  Sarbanes-Oxley  Act of 2002,  I,  Bradford  T.  Ray,  Chief
Executive Officer of Steel Technologies Inc., (the Company) certify, to the best
of my knowledge, based upon a review of the Quarterly Report on Form 10-Q of the
Company for the quarter ended June 30, 2005:

     (1)  The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

                                                      /s/ Bradford T. Ray
                                                      -------------------
                                                      Bradford T. Ray
                                                      Chief Executive Officer
                                                      Date: August 8, 2005

<page>
                                  EXHIBIT 32.1


                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
             PURSUANT TO TITLE 18, UNITED STATES CODE, SECTION 1350
      AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Title 18, United States Code,  Section 1350, as adopted  pursuant to
Section  906 of the  Sarbanes-Oxley  Act of 2002,  I,  Bradford  T.  Ray,  Chief
Executive Officer of Steel Technologies Inc., (the Company) certify, to the best
of my knowledge, based upon a review of the Quarterly Report on Form 10-Q of the
Company for the quarter ended June 30, 2005:

     (1)  The Report fully  complies with the  requirements  of Section 13(a) or
          15(d) of the Securities Exchange Act of 1934; and

     (2)  The  information  contained  in the  Report  fairly  presents,  in all
          material respects,  the financial  condition and results of operations
          of the Company.

                                                      /s/ Joseph P. Bellino
                                                      ---------------------
                                                      Joseph P. Bellino
                                                      Chief Financial Officer
                                                      Date: August 8, 2005