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<SEC-DOCUMENT>0000950152-08-007650.txt : 20081204
<SEC-HEADER>0000950152-08-007650.hdr.sgml : 20081204
<ACCEPTANCE-DATETIME>20081003085623
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0000950152-08-007650
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20081003

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			OLYMPIC STEEL INC
		CENTRAL INDEX KEY:			0000917470
		STANDARD INDUSTRIAL CLASSIFICATION:	WHOLESALE-METALS SERVICE CENTERS & OFFICES [5051]
		IRS NUMBER:				341245650
		STATE OF INCORPORATION:			OH
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		5080 RICHMOND RD
		CITY:			BEDFORD HEIGHTS
		STATE:			OH
		ZIP:			44146
		BUSINESS PHONE:		2162923800

	MAIL ADDRESS:	
		STREET 1:		5096 RICHMOND RD
		CITY:			BEDFORD HEIGHTS
		STATE:			OH
		ZIP:			44146
</SEC-HEADER>
<DOCUMENT>
<TYPE>CORRESP
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
<HTML>
<HEAD>
<TITLE>CORRESP</TITLE>
</HEAD>
<BODY bgcolor="#FFFFFF">
<!-- PAGEBREAK -->
<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><IMG src="l34011al3401190.gif">

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B>Corporate Headquarters<BR>
5096 Richmond Road<BR>
Bedford Heights, Ohio 44146<BR>
(216)&nbsp;292-3800<BR>
(800)&nbsp;321-6290<BR>
(216)&nbsp;292-3974/Fax<BR>
info@olysteel.com<BR>
www.olysteel.com</B>

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt">October&nbsp;3, 2008
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>VIA EDGAR </U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
100 F Street, N.E.<BR>
Washington, DC 20549<BR>
Attention: Ms.&nbsp;Cvrkel, Division of Corporation Finance

</DIV>
<DIV align="left">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="40%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="20%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="75%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><B>Re:</B>
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Olympic Steel, Inc.</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Form&nbsp;10-K for the year ended December&nbsp;31, 2007</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>Filed March&nbsp;14, 2008</B></TD>
</TR>
<TR valign="bottom">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>File Number 000-23320</B></TD>
</TR>
<TR style="font-size: 1px">
    <TD align="right" valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt">Dear Ms.&nbsp;Cvrkel:
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Olympic Steel, Inc., an Ohio corporation (the &#147;Company&#148;), is submitting this letter in
response to the comment letter from the staff of the Securities and Exchange Commission (the
&#147;Commission&#148;) dated September&nbsp;24, 2008 (the &#147;Comment Letter&#148;) with respect to the Company&#146;s Annual
Report on Form 10-K for the year ended December&nbsp;31, 2007, filed March&nbsp;14, 2008.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Below is the Company&#146;s response to the comment in the Comment Letter. For the convenience of
the staff, we have repeated the staff&#146;s comment before our corresponding response.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><U>Form&nbsp;10-K for the year ended December&nbsp;31, 2007</U>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><U>Note 4. Property and Equipment, page 37.</U>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="3%" nowrap align="left"><I>1.</I></TD>
    <TD width="1%">&nbsp;</TD>
    <TD><I>We have reviewed your response to our prior comment number 8 but are still unclear as to how
your capitalization policies for software and related technology costs comply with the
guidance in SOP 98-1. As previously requested, please tell us and explain in further detail
your accounting policy for software development
costs. As part of your response and your revised disclosure, please indicate the nature
and timing of the costs incurred which are capitalized and the nature and timing of the
costs expensed.</I></TD>
</TR>


</TABLE>
</DIV>
<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
October&nbsp;3, 2008<BR>
Page 2

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Response</U>: We believe our cost capitalization policies for software and related
technology costs comply with SOP 98-1, &#147;Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use.&#148; In accordance with SOP 98-1, we determined that our current
information systems project qualified for &#147;internal use&#148; only, as it will be used solely to meet
Olympic Steel&#146;s internal needs and we have no plans to market our software externally. At each
stage of the software development project &#151; preliminary project stage, application development
stage and post implementation stage &#151; we identify and accumulate costs incurred and determine
which items are properly capitalized or expensed in accordance with SOP 98-1.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The project involving our Company&#146;s new information systems commenced in 2006. By the end of
2007, we had completed the preliminary project stage and we were in the application development
stage. Project costs incurred through 2007 included software and licensing fees, hardware costs,
internal payroll and external consulting costs.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All costs related to the design and configuration of the software and interfaces, coding,
installation of hardware, development of software to convert old data for the new system and
testing, were capitalized to &#147;construction in progress,&#148; and totaled $4.0&nbsp;million through December
31, 2007, consisting of $2.3&nbsp;million incurred in 2006 and $1.7&nbsp;million incurred in 2007. We will
amortize these capitalized costs on a straight-line basis over their estimated useful lives, which
we believe is five years, beginning when the software is ready for its intended use. We currently
expect the software to begin phased-in use commencing in 2009.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All costs related to the preliminary project stage, the purging and cleansing of existing data
and the creating, reconciling or converting old data into the new system and user training have
been expensed, and totaled $1.54&nbsp;million in 2006 and $2.05&nbsp;million in 2007.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In future filings we will disclose our accounting policy for software development costs, and
we will indicate the nature and timing of the costs capitalized, and the nature and timing of the
costs expensed.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always">&nbsp;</H5><P>

<DIV style="font-family: 'Times New Roman',Times,serif">

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Securities and Exchange Commission<BR>
October&nbsp;3, 2008<BR>
Page 3

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;

</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>* &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; * &nbsp;&nbsp;&nbsp;&nbsp;&nbsp; *</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In connection with the above response, the Company acknowledges that:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company is responsible for the adequacy and accuracy of the disclosure in the
filing;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>staff comments or changes to disclosure in response to staff comments do not
foreclose the Commission from taking any action with respect to the filing; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>the Company may not assert staff comments as a defense in any proceeding initiated
by the Commission or any person under the federal securities laws of the United
States.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="margin-left: 0%; text-indent: 0%; margin-right: 0%; font-size: 10pt; margin-top: 6pt">If you have any questions regarding these matters, please do not hesitate to contact the
undersigned at (216)&nbsp;682-4040.</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Sincerely,

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">/s/Richard T. Marabito

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">OLYMPIC STEEL, INC.

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt; margin-left: 50%">Richard T. Marabito<BR>
Chief Financial Officer

</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>




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