News Release

Schnitzer Steel Invests in Significant Upgrades to Its Portland Metals Recycling Operation

PORTLAND, Ore.--(BUSINESS WIRE)--Dec. 14, 2005--Schnitzer Steel Industries, Inc. (NASDAQ: SCHN) today announced the purchase of a state-of-the-art Metso Texas Shredder 122x108 for its Portland, Oregon metals recycling operation. The new shredder is equipped with a 7,000 horsepower motor and will nearly double the operation's metal shredding capacity, currently 250,000 tons per year, to approximately 480,000 tons per year - while only increasing total energy consumption by 10 percent. It will replace equipment that has been in place since the early 1970s. As part of the upgrade, Schnitzer Steel will also install a new electric substation and 115 kV transmission line, and a downstream ferrous metals recovery system with a designed output capacity of 40,000 tons per month. Schnitzer Steel's investment in these upgrades will total more than $14 million.

"As Schnitzer Steel prepares to enter its 100th year in business - a business founded in Oregon - we are making considerable re-investments in our Portland metals recycling operation to enhance its position as a leading West Coast metals processor and recycler. These investments will significantly increase the production capacity and cost efficiency of our operations, allowing us to recycle considerably more metal at a lower cost per ton," stated Jim Goodrich, general manager for Schnitzer Steel's Portland metals recycling operation. "We look forward to the direct benefits these investments will provide for our customers and suppliers, our community, and our 122 talented and valued employees."

Schnitzer Steel is collaborating with Portland General Electric (PGE), the utility serving its Portland operation, on the installation of the high-efficiency shredder. In addition to providing engineering and construction support, PGE also assisted the Company in applying for financial incentives from the Energy Trust of Oregon and a Business Energy Tax Credit from The Oregon Department of Energy. PGE estimates that the new shredder will create energy savings of two million kilowatt hours annually through production efficiencies. As a result, the shredder project has been approved for a $410,000 production efficiency incentive from the Energy Trust of Oregon and a $360,000 Business Energy Tax Credit.

"PGE was instrumental in identifying opportunities for savings and assisting us with the application process. We truly appreciate their assistance and their willingness to work closely with us on the installation of the new shredder," said Jay Robinovitz, Pacific Northwest vice president of operations for Schnitzer Steel. "We also offer our thanks to the Energy Trust of Oregon and The Oregon Department of Energy for their dedication in promoting energy efficiency throughout the state."

The new shredder and related projects are just a few of the many significant investments currently underway at Schnitzer Steel's Portland operation. The Company is rebuilding its dock on the site and upgrading its ship-loading crane. Schnitzer Steel's marine terminal operation is adjacent to a 40-foot-deep navigation channel that provides ready access to world markets.

"These investments will further enhance our operation's competitiveness and capabilities, and Schnitzer Steel's leadership in the global steel marketplace," stated Robinovitz. "As world-wide demand for scrap steel continues to increase, we competitively serve both export markets, such as Asia and Europe, through our strategically-located, deep-water ports and global trade brokerage business, and domestic customers, like our Cascade Steel Rolling Mill in McMinnville, Oregon."

Schnitzer Steel's Portland operation receives scrap metal from sources located throughout the Pacific Northwest. Old car bodies, appliances, rail cars, industrial equipment and other sources of metal are processed through the shredder and separated into ferrous and non-ferrous metals. Steel mills and other manufacturers throughout the world use these recycled materials to create new, finished products.

Schnitzer Steel has a history of making consistent and meaningful investments in its operations. Over the past five years alone, the Company has invested more than $77 million in capital improvements in its wholly owned recycling and steel manufacturing businesses. Additional, significant capital improvements planned for 2006 include the installation of state-of-the-art mega-shredders at the Company's Oakland, California and Everett, Massachusetts facilities, and the initiation of induction sorting systems at its Oakland; Tacoma, Washington; and Johnston, Rhode Island facilities to recover increased volumes of nonferrous metals from the shredding process. These projects, and others, will substantially increase the Company's capacities, improve operational efficiencies and capabilities, and reduce energy consumption, while meeting commitments to workplace safety and environmental quality.

Schnitzer Steel Industries, Inc. is one of the nation's largest recyclers of 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 recycling 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

Statements in this press release regarding future capacities, energy consumption reductions and cost savings are "forward-looking statements" within the meaning of U.S. federal securities laws. The Company intends that these statements be covered by the safe harbors created under these laws. These forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results to differ materially from future results expressed or implied by the forward-looking statements. Examples of factors that could cause actual results to differ materially from current expectations are the following: delays or difficulties in installing equipment, equipment design defects or failures, energy price fluctuations and other factors, as discussed in more detail under the heading "Factors That Could Affect Future Results" in the Company's most recent annual report on Form 10-K. One should understand that it is not possible to predict or identify all factors that could cause actual results to differ from the Company's forward-looking statements. Moreover, many of these factors and events are beyond the Company'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. The Company 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: For Schnitzer Steel:
             Gard & Gerber
             David Dugan, 503-552-5008

    SOURCE: Schnitzer Steel Industries, Inc.

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