EXHIBIT 10.36

                                  AMENDMENT TO
                             THE QUANEX CORPORATION
                          1997 KEY EMPLOYEE STOCK PLAN


         THIS AGREEMENT by Quanex Corporation (the "Company"),

                                   WITNESSETH:

         WHEREAS, the Board of Directors of the Company previously adopted the
plan agreement known as the "Quanex Corporation 1997 Key Employee Stock Plan"
(the Plan);

         WHEREAS, the Board of Directors of the Company retained the right in
Article XI of the Plan to amend the Plan from time to time; and

         WHEREAS, the Board of Directors of the Company has approved the
following amendment to the Plan;

         NOW, THEREFORE, Article IV of the Plan is hereby amended and restated
in its entirety to provide as follows:

                  The total amount of the Common Stock with respect to which
         Awards may be granted shall not exceed in the aggregate 400,000 shares.
         The class and aggregate number of shares which may be subject to the
         Options granted under this Plan shall be subject to adjustment under
         Section 5.5. The class and aggregate number of shares which may be
         subject to the Restricted Stock Awards granted under the Plan shall
         also be subject to adjustment under Section 7.4. Shares may be treasury
         shares or authorized but unissued shares. If any Award under the Plan
         shall expire or terminate for any reason without having been exercised
         in full, or if any Award shall be forfeited, the shares subject to the
         unexercised or forfeited portion of such Award shall again be available
         for the purposes of the Plan.


Dated: October 25, 2001