UPDATE 1-Reliance Steel sees Q3 higher than Street view

* Sees Q3 earnings per share 40 cents to 45 cents

* Says still no meaningful improvement in demand

* Stock rises in premarket trading

NEW YORK, Sept 29 (Reuters) - Metals processor Reliance Steel & Aluminum Co (RS.N) said on Tuesday it expects third-quarter earnings to be higher than current Wall Street expectations due to higher prices and increased profit margins.

The Los Angeles-based company expects earnings to be in the range of 40 cents to 45 cents per diluted share. The current consensus of analysts is for 28 cents per share, according to Reuters Estimates.

The outlook sent Reliance shares up 64 cents to $42.90 in electronic trading before the New York Stock Exchange opened.

In July, when Reliance posted a second-quarter loss, it did not give an estimate for the third quarter and said it did not expect improvement in demand for the rest of the year.

But on Tuesday, Chairman and Chief Executive Officer David Hannah said gross profit margins have increased from the historically low margins in the second quarter.

The higher margins have continued into September, due to inventory reflecting more current costs and due to mill price increases for many products, he said.

"(But) Overall, we still have not seen any meaningful improvement in demand, although average shipping volumes per day have improved slightly from our low in July. Our updated earnings guidance reflects our current expectations."

(Reporting by Steve James, editing by Dave Zimmerman)