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                                                                     EXHIBIT 5.1
 
                         [BARRETT & MCNAGNY LETTERHEAD]
 
                                                               ROBERT S. WALTERS
                                                             Direct 219-423-8905
 
July   , 1997
 
Steel Dynamics, Inc.
4500 County Road 59
Butler, IN 46721
 
Dear Sirs:
 
     In connection with the registration under the Securities Act of 1933, as
amended (the "Act") by Steel Dynamics, Inc. (the "Company") of approximately
          shares of its Common Stock, in a proposed public offering registered
with the United States Securities and Exchange Commission on Form S-1, we have
examined such corporate records, certificates, and other documents, and have
reviewed such questions of law as we have considered necessary or appropriate
for purposes of this opinion.
 
     On the basis of such examination and review, we advise you that, in our
opinion, when the Registration Statement on Form S-1 filed by the Company
herewith with respect to such offering of its Common Stock shall have become
effective under the Act, and when the certificates evidencing the shares of
Common Stock purchased in connection herewith shall have been issued, executed,
authenticated and delivered by the Company and by First Chicago Trust Company of
New York as its transfer agent, and when sold in accordance with the terms set
forth in the Underwriting Agreement between the Company and Morgan Stanley & Co.
Incorporated, as the representative of the underwriters identified therein, the
shares of Common Stock will be validly and legally issued and outstanding, will
be fully paid and non-assessable, and will be entitled to the benefits described
for the Common Stock in the Company's Amended and Restated Articles of
Incorporation.
 
     We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Legal
Opinions" in the Prospectus forming part of the Registration Statement. In
giving such consent, we do not thereby admit that we are in the category of
persons whose consent is required under Section 7 of the Act or the Rules and
Regulations of the Securities and Exchange Commission thereunder.
 
Very truly yours,
 
BARRETT & McNAGNY
 
Robert S. Walters
 
RSW:klv:104464
