News Release

Schnitzer Steel Announces Completion of Its Joint Venture Separation Agreement with Hugo Neu Corporation

PORTLAND, Ore.--(BUSINESS WIRE)--Oct. 3, 2005--Schnitzer Steel Industries, Inc. (NASDAQ:SCHN) today announced that it and Hugo Neu Corporation ("Hugo Neu") completed the transaction contemplated by the previously announced Master Agreement that provided for the separation and termination of various joint venture relationships.

"We not only received very attractive scrap metal franchises, but an excellent team of motivated people that have helped build these quality businesses," said John D. Carter, President and Chief Executive Officer. "We are making good progress toward integrating these businesses into our existing operations. It's been our pleasure to begin to become better acquainted with the managers and employees who operate these businesses. We believe these businesses combined with our existing wholly-owned operations will produce significant benefits in making Schnitzer an even greater company in the years ahead."

Mr. Carter added: "In particular, we would like to thank John Neu, the rest of the Hugo Neu team and the joint venture personnel remaining with Hugo Neu for their hard work in helping us build the many joint venture businesses. Many of these people were instrumental in the growth and success of the joint ventures, and we sincerely wish them the very best in operating the excellent businesses Hugo Neu received as part of the separation."

    Under the joint venture Master Agreement, Schnitzer received:

    --  The assets and related liabilities of Hugo Neu Schnitzer
        Global Trade ("HNS Global Trade") related to the trading
        business in Russia, Poland, Denmark, Finland, Norway and
        Sweden, and a non-compete agreement from Hugo Neu that bars
        them from buying scrap metal in certain areas in Russia and
        the Baltic region for a five-year period ending on June 8,

    --  The joint ventures' various interests in the New England
        operations that primarily operate in Massachusetts, New
        Hampshire, Rhode Island and Maine.

    --  Full ownership in the Hawaii operations that was previously
        owned 100% by Hugo Neu.

    --  A payment of $52.3 million in cash, subject to post-closing

    Hugo Neu, in exchange, assumed total ownership of:

    --  The joint venture operations in New York, New Jersey and
        California, including the scrap processing facilities, marine
        terminals and related ancillary satellite sites, the interim
        New York City Recycling Contract, and other miscellaneous

    --  The portions of Hugo Neu Schnitzer Global Trade ("HNS Global
        Trade"), a joint venture engaged primarily in scrap metal
        trading, that is not related to the Russian and Baltic trading
        business. This was split with HNS Global Trade redeeming its
        50% membership interest from Schnitzer.

The initial announcement that described the detailed terms of the deal was made on June 9, 2005 and can be obtained on Schnitzer's website at In summary, the objective of the separation was to provide each partner with an equitable portion of the various joint operations.

Conference Call

Schnitzer will hold a conference call on October 6, 2005 to discuss its fourth quarter 2005 earnings release and to briefly discuss the joint venture separation. The conference call will be broadcast over the Internet on October 6, 2005, at 11:30 a.m. EDT with John Carter, President and Chief Executive Officer, Kenneth Novack, Chairman of the Board, Greg Witherspoon, Interim Chief Financial Officer and Kelly Lang, Vice President, Asset and Business Integration. The call is being webcast by CCBN and can be accessed on Schnitzer Steel's web site at

Schnitzer Steel Industries, Inc. is one of the nation's largest recyclers of ferrous metals, a used auto parts retailer with more than 50 locations across the U.S. and in Canada, and a manufacturer of finished steel products. The Company has a significant metals presence on both the West Coast and Northeastern seaboard, as well as a trading business that principally sells recycled metal products in foreign markets. In addition, the Company's steel mill has an annual production capacity of approximately 700,000 tons of finished steel products. For more information about Schnitzer Steel Industries, Inc., visit

Certain statements in the press release are "forward-looking statements' within the meaning of U.S. federal securities laws. Schnitzer Steel Industries, Inc. intends that these statements be covered by the safe harbors created under these laws. These forward-looking statements include, but are not limited to, statements about expected benefits of the transactions contemplated by the joint venture separation. These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results or events to differ materially from future results or events expressed or implied by the forward-looking statements. Important factors that could cause actual results to differ materially from the information set fourth in these forward-looking statements include factors and events, some of which are discussed in Schnitzer's Annual Report on Form 10-K for fiscal 2004 filed in December 2004 and Schnitzer's recent quarterly report on Form 10-Q filed in July 2005, and include the Schnitzer's ability to successfully integrate the new businesses received or acquired in the joint venture separation. Many of these factors and events are beyond Schnitzer's ability to control or predict. Given these uncertainties readers are cautioned not to place undue reliance on the forward-looking statements, which only speak as of the date of this press release. Schnitzer does not undertake any obligation to release publicly any revisions to these forward -looking statements to reflect events or circumstances after the date of this press release or to reflect the occurrence of unanticipated events, except as may be required under applicable securities laws.

    CONTACT: Schnitzer Steel Industries, Inc.
             Tom Zelenka, 503-323-2821

    SOURCE: Schnitzer Steel Industries, Inc.

Data provided by Thomson Reuters