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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 11-K

ý	Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 2003

Commission File Number 1-5725

A.

Full title of the plan and the address of the plan, if different from that of the issuer named below:

Quanex Corporation Hourly Bargaining Unit Employees Savings Plan

B.

Name of the issuer of the securities held pursuant to the plan and the address of its principal executive office:

Quanex Corporation
1900 West Loop South, Suite 1500
Houston, TX 77027

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

The Benefits Committee
Quanex Corporation
Houston, Texas

Re: Quanex Corporation Hourly Bargaining Unit Employees Savings Plan

We have audited the accompanying statements of net assets available for benefits of the Quanex Corporation Hourly Bargaining Unit Employees Savings Plan ("the Plan") as of December 31, 2003 and 2002, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such financial statements present fairly, in all material respects, the net assets available for benefits of the Plan as of December 31, 2003 and 2002, and the changes in net assets available for benefits for the years then ended in conformity with accounting principles generally accepted in the United States of America.

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2003 is presented for the purpose of additional analysis and is not a required part of the basic financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. This supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole.

/s/  DELOITTE & TOUCHE, LLP       DELOITTE & TOUCHE, LLP

Houston, Texas
June 23, 2004

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QUANEX CORPORATION
HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

			DECEMBER 31,
			2003			2002
Assets:
	Investments at fair value (see Note C)		$	14,261,690		$	11,835,194
	Employee contributions receivable			103,530			91,122
Net assets available for benefits			$	14,365,220		$	11,926,316

See notes to financial statements.

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QUANEX CORPORATION
HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE
FOR BENEFITS

				DECEMBER 31,
				2003			2002
Investment income:
	Interest and dividends			$	180,368		$	175,831
	Net appreciation (depreciation) in fair value of investments (see Note C)				2,082,028			(1,773,802	)
					2,262,396			(1,597,971	)
Employee contributions					1,305,308			1,464,366
		Total additions			3,567,704			(133,605	)
Benefit payments					907,603			1,253,464
Administrative fee (see Note D)					25			25
		Total deductions			907,628			1,253,489
Transfers between plans (see Note G)					(221,172	)		(343,202	)
Decrease in net assets available for benefits					2,438,904			(1,730,296	)
Net assets available for benefits:
	Beginning of year				11,926,316			13,656,612
	End of year			$	14,365,220		$	11,926,316

See notes to financial statements.

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QUANEX CORPORATION
HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN
EIN: 38-1872178; PN 015

Schedule H, Line 4i — Schedule of Assets (Held at End of Year)
December 31, 2003

(a)		(b) Identity of issue, borrower, lessor or similar party		(c) Description of investment including maturity date, rate of interest, collateral, par, or maturity value		(d) Cost			(e) Current Value
*		Fidelity		Puritan Fund		$	1,227,884		$	1,269,555
*		Fidelity		Magellan Fund			3,653,879			3,440,572
*		Fidelity		Contrafund			901,041			961,781
*		Fidelity		Growth & Income Fund			1,255,793			1,148,625
*		Fidelity		Independence Fund			1,402,169			1,028,716
*		Fidelity		Overseas Fund			325,633			332,523
*		Fidelity		Balanced Fund			408,011			443,355
*		Fidelity		Blue Chip Fund			873,619			829,421
*		Fidelity		Asset Manager Fund			41,368			43,543
*		Fidelity		Low-Priced Stock Fund			373,342			444,746
*		Fidelity		Government Money Market Fund			2,679,858			2,679,858
		Templeton		Foreign Fund			214,314			237,272
		Neuberger & Berman		Partners Trust Fund			62,630			66,525
				Total Mutual Fund Assets			13,419,541			12,926,492
*		Quanex Corporation unitized common stock					370,158			660,703
*		Fidelity		Managed Inconme Portfolio			674,495			674,495
				Total Investments		$	14,464,194		$	14,261,690

* Party-in-Interest

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QUANEX CORPORATION
HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2003 AND 2002

A.

DESCRIPTION OF THE PLAN

The following description of the Quanex Corporation Hourly Bargaining Unit Employees Savings Plan (the "Plan") provides only general information. Participants should refer to the Plan document for more complete information.

(1)

General. The Plan is a defined contribution plan which covers hourly paid union employees of the MACSTEEL divisions of the Quanex Corporation (the "Company"). The Plan is subject to the Employee Retirement Income Security Act of 1974 ("ERISA"). Fidelity Management Trust Company ("Fidelity" or the "Trustee") holds the assets of the Plan in trust. The Benefits Committee (the "Committee"), appointed by the Company's Board of Directors, serves as the Plan administrator.



(2)

Contributions. Participants may elect to contribute up to 15 percent of their before-tax or after-tax compensation as defined by the Plan agreement.



(3)

Participant Accounts. Each participant's account is credited with the participant's contribution and an allocation of investment income, which is based on individual participant account balances as of the end of the period in which the income is earned.



(4)

Vesting. Participants are immediately vested in their contributions and the related earnings.



(5)

Payment of Benefits. Upon termination of service, the participant may elect to receive a lump sum distribution equal to the total amount of vested benefits in his or her account. Terminated participants with an account balance of less than $5,000 will automatically receive a lump sum distribution.

B.

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(1)

Accounting Basis. The financial statements of the Plan are prepared on the accrual basis of accounting in accordance with accounting principles generally accepted in the United States of America.

(2)

Investment Valuation. The Plan recognizes net appreciation or depreciation in the fair value of its investments. Investments are reflected at fair value in the financial statements. Fair value of mutual fund assets is determined using a quoted net asset value. Fair value for Quanex Corporation common stock, which is listed on the New York Stock Exchange, is determined by using the last recorded sales price. The recorded value of the common/commingled trust is at face value, which is fair value.

Purchases and sales of securities are recorded on a trade-date basis. Interest income is recorded on the accrual basis. Dividends are recorded on the ex-dividend date.

Management fees and operating expenses charged to the Plan for investments in the mutual funds are deducted from income earned on a daily basis and are not separately reflected. Consequently, management fees and operating expenses are reflected as a reduction of investment return for such investments.

(3)

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and changes therein and disclosure of contingent assets and liabilities. Actual results could differ from these estimates.

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(4)

Administrative Expenses. The Company pays the administrative expenses of the Plan, except loan set up and carrying fees and redemption fees imposed on certain Fidelity funds.



(5)

Payment of Benefits. Benefit payments are recorded when paid.



(6)

Risks and Uncertainties. The Plan utilizes various investment instruments, including mutual funds and common stock. Investment securities, in general, are exposed to various risks, such as interest rate, credit, and overall market volatility. Due to the level of risk associated with certain investment securities, it is reasonably possible that changes in the values of investment securities will occur in the near term and that such changes could materially affect the amounts reported in the financial statements.

C.

INVESTMENTS

The following are investments that represent 5 percent or more of the Plan's net assets available for benefits.

During the years ended December 31, 2003 and 2002, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated / (depreciated) in value as follows:

D.

RELATED PARTY TRANSACTIONS

Certain Plan investments are shares of mutual funds managed by Fidelity. Fidelity is the trustee as defined by the Plan and, therefore, these transactions qualify as party-in-interest transactions. In addition, the Plan invests in shares of Quanex Corporation unitized common stock. Quanex Corporation is the Plan sponsor as defined by the Plan and, therefore, these transactions also qualify as party-in-interest transactions. As of December 31, 2003 and 2002, the value of Quanex Corporation common stock held by the Plan was $660,703 and $763,159, respectively.

E.

PLAN TERMINATION

Although it has not expressed any intention to do so, the Company has the right under the Plan to terminate the Plan at any time subject to the provisions set forth in ERISA. In the event of Plan termination, the assets held by the Trustee under the Plan will be valued and fully vested, and each participant will be entitled to distributions respecting his or her account.

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F.

FEDERAL INCOME TAX STATUS

The Plan is subject to specific rules and regulations related to employee benefit plans under the Department of Labor and the Internal Revenue Service. The Plan has received a favorable letter of tax determination dated August 19, 2002. As such, the Plan is qualified Section 401(a) of the Internal Revenue Code (the "Code") and, as a result, the trust is exempt from federal income tax under Section 501(a) of the Code. The Company believes the Plan is currently designed and being operated in compliance with the applicable requirements of the Code. The Company believes the Plan was qualified and the related trust was tax-exempt as of the financial statement dates.

G.

TRANSFER OF ASSETS

Account balances of $(221,172) and $(343,202) were transferred between the Plan and the Quanex Corporation Employee Saving Plan in plan years 2003 and 2002, respectively.

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SIGNATURES

        The Plan. Pursuant to the requirements of the Securities Exchange Act of 1934, the trustees (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized.

	Quanex Corporation Hourly Bargaining Unit Employees Savings Plan
Date: June 28, 2004	/s/ Ricardo Arredondo Ricardo Arredondo, Benefits Committee

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INDEX TO EXHIBITS

23.1

Consent of Independent Registered Public Accounting Firm

99.1

Certification by chief executive officer and chief financial officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

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REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
QUANEX CORPORATION HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
Schedule H, Line 4i — Schedule of Assets (Held at End of Year) December 31, 2003
NOTES TO FINANCIAL STATEMENTS YEARS ENDED DECEMBER 31, 2003 AND 2002
SIGNATURES
INDEX TO EXHIBITS