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, 2002

	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 Saving 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

INDEPENDENT AUDITORS’ REPORT

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, 2002 and 2001, 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 auditing standards generally accepted in the United States of America. 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, 2002 and 2001, 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 investments as of December 31, 2002 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 25, 2003

QUANEX CORPORATION

HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS

	DECEMBER 31,
	2002		2001
Assets:
Investments at fair value (see Note C)	$	11,835,194	$	13,579,018

Employee contributions receivable	91,122		77,594

Net assets available for benefits	$	11,926,316	$	13,656,612

See notes to financial statements.

QUANEX CORPORATION

HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE

FOR BENEFITS

	DECEMBER 31,
	2002			2001
Investment income:
Interest and dividends	$	175,831		$	318,277
Net depreciation in fair value of investments (see Note C)	(1,773,802		)	(940,098		)
	(1,597,971		)	(621,821		)

Employee contributions	1,464,366			1,308,895
Total additions	(133,605		)	687,074

Benefit payments	1,253,464			960,133
Administrative fee (see Note D)	25			74
Total deductions	1,253,489			960,207

Transfers between plans (see Note G)	(343,202		)	(1,362		)

Decrease in net assets available for benefits	(1,730,296		)	(274,495		)

Net assets available for benefits:
Beginning of year	13,656,612			13,931,107
End of year	$	11,926,316		$	13,656,612

See notes to financial statements.

QUANEX CORPORATION

HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

Schedule H, Line 4i - Schedule of Assets (Held at End of Year)

December 31, 2002

(a)	(b) Identity of issue	(c) Description of investment	(d) Cost (1)	Current Value
*	Fidelity Puritan Fund	Mutual fund		$	1,015,425
*	Fidelity Magellan Fund	Mutual fund		2,927,104
*	Fidelity Contrafund	Mutual fund		699,090
*	Fidelity Growth & Income Fund	Mutual fund		915,666
*	Fidelity Independence Fund	Mutual fund		882,225
*	Fidelity Overseas Fund	Mutual fund		179,064
*	Fidelity Balanced Fund	Mutual fund		214,979
*	Fidelity Blue Chip Fund	Mutual fund		506,859
*	Fidelity Asset Manager Fund	Mutual fund		26,359
*	Fidelity Low-Priced Stock Fund	Mutual fund		247,593
*	Fidelity Government Money Market Fund	Mutual fund		2,808,535
*	Fidelity Common/Commingled trust	Mutual fund		477,543
	Templeton Foreign Fund	Mutual fund		138,871
	Neuberger & Berman Partners Trust Fund	Mutual fund		32,722

	Total Mutual Fund Assets			11,072,035

*	Quanex Corporation	Unitized common stock		763,159

	Total Investments			$	11,835,194

* Party-in-Interest

(1) Cost omitted because all investments are participant directed.

QUANEX CORPORATION

HOURLY BARGAINING UNIT EMPLOYEES SAVINGS PLAN

NOTES TO FINANCIAL STATEMENTS

YEARS ENDED DECEMBER 31, 2002 AND 2001

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 became effective January 1, 1989 and is sponsored by Quanex Corporation (the “Company”). The Plan is a defined contribution plan, which is subject to the Employee Retirement Income Security Act of 1974 (“ERISA”). The Plan is a voluntary savings plan in which union hourly employees of the MACSTEEL divisions of the Company are eligible to participate after completing three months of active service. 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 generally accepted accounting principles.

(2) Investment Valuation. 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 unitized common stock, which is listed on the New York Stock Exchange, is determined using the last recorded sales price. The recorded value of the common/commingled trust is at face value, which is fair value. The sale or purchase of securities is recorded on the trade date. Interest income is recorded as earned on the accrual basis. Dividends are recorded on the ex-dividend date. The net depreciation in fair value of investments consists of the net change in both the unrealized appreciation (depreciation) in fair value of investments and the net realized gains (losses) upon the sale of investments. The net change in unrealized appreciation (depreciation) and realized gains (losses) upon sale are determined using the fair values as of the beginning of the year or the purchase price if acquired since that date.

(3) Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles 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.

(4) Risks and Uncertainties – The Plan, through its investment options, holds various investments including foreign and domestic corporate debt and equity securities as well as obligations of the United States government. Investment securities, in general, are exposed to various risks, such as interest rate, credit and overall market volatility risk. 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.

(5) Administrative Expenses. The Company pays all administrative expenses, except redemption fees imposed on certain Fidelity funds.

(6) Payment of Benefits. Benefit payments are recorded when paid.

C. INVESTMENTS

The following are investments that represent 5 percent or more of the Plan’s investments.

	December 31, 2002			December 31, 2001
	Shares	Amount		Shares	Amount
Fidelity Puritan Fund	64,308	$	1,015,425	61,772	$	1,091,521
Fidelity Magellan Fund	37,071	2,927,104		38,578	4,020,657
Fidelity Contrafund	18,111	699,090		14,120	603,937
Fidelity Growth & Income Fund	30,210	915,666		28,614	1,069,597
Fidelity Independence Fund	67,500	882,225		71,821	1,132,616
Fidelity Government Money Market Fund	2,808,535	2,808,535		3,075,143	3,075,143
Quanex unitized common stock	48,764	763,159		64,739	857,146

During the years ended December 31, 2002 and 2001, 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:

	2002			2001
Mutual funds	$	(1,890,007	)	$	(1,373,859	)
Quanex unitized common stock	116,205			433,761
	$	(1,773,802	)	$	(940,098	)

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, 2002 and 2001, the value of Quanex Corporation common stock held by the Plan was $763,159 and $857,146, 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.

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 a qualified trust under Sections 401(a) and 401(k) of the

Internal Revenue Code (the “Code”) and, as a result, 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 $(343,202) and $(1,362) were transferred between the Plan and the Quanex Corporation Employee Saving Plan in plan years 2002 and 2001, respectively.

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 30, 2003		/s/ Ricardo Arredondo
		Ricardo Arredondo, Benefits Committee

INDEX TO EXHIBITS

23.1	Independents Auditor’s Consent
99.1	Certification by chief financial officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
99.2	Certification by chief executive officer pursuant to 18 U.S.C. Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002