1

November 2006

2

Schnitzer Steel Business OverviewSchnitzer Steel Business Overview Three Important Businesses Forming One Integral Company

Metals RecyclingMetals Recycling

Steel Steel ManufacturingManufacturing

Auto PartsAuto Parts

One of the country’s largest metals One of the country’s largest metals recyclersrecyclers

Sales volumes of >5 million ferrous Sales volumes of >5 million ferrous tons annuallytons annually

Non ferrous sales volumes of over Non ferrous sales volumes of over 300 million pounds annually300 million pounds annually

35 self-service stores35 self-service stores

17 full-service locations17 full-service locations

~250,000 cars processed per year~250,000 cars processed per year

~4mm of annual retail admissions~4mm of annual retail admissions

102% sales growth from FY05-FY06102% sales growth from FY05-FY06

700-800k tons annual capacity700-800k tons annual capacity

Record performance for last two Record performance for last two consecutive yearsconsecutive years

Favorable West Coast steel market Favorable West Coast steel market conditionsconditions

Vertically integrated Vertically integrated metals recycler with metals recycler with 81 operations in 22 81 operations in 22 states and Western states and Western CanadaCanada

Over 3,000 employeesOver 3,000 employees

Sou

rce

of

Sup

ply

Source of

Scrap S

upply

Growth Capital

3

Investor HighlightsInvestor Highlights

Significant 2006 accomplishmentsSignificant 2006 accomplishments

Dramatic increase in scale and geographic presenceDramatic increase in scale and geographic presence

Successful integration of acquisitionsSuccessful integration of acquisitions

Strong financial performanceStrong financial performance

Significant investments in technology to increase capacity and Significant investments in technology to increase capacity and improve productivityimprove productivity

Positive long-term fundamentals and competitive advantages Positive long-term fundamentals and competitive advantages underpinning business outlookunderpinning business outlook

Management optimistic about 2007 opportunities to create Management optimistic about 2007 opportunities to create shareholder valueshareholder value

Strong balance sheet and cash flows provide flexibility to pursue Strong balance sheet and cash flows provide flexibility to pursue further technological improvements, value creating acquisitions further technological improvements, value creating acquisitions and share repurchasesand share repurchases

4

Significant 2006 Accomplishments-Significant 2006 Accomplishments-ScaleScale Dramatic increase in scale and geographic presenceDramatic increase in scale and geographic presence

Successful integration of four acquisitionsSuccessful integration of four acquisitions

Doubling of ferrous processing volumes; 2.5X increase in non Doubling of ferrous processing volumes; 2.5X increase in non ferrous volumesferrous volumes

Doubling of auto parts revenue; 17% increase in self-service Doubling of auto parts revenue; 17% increase in self-service locations and entry into full-service marketlocations and entry into full-service market

100k ton increase in steel manufacturing sales volumes100k ton increase in steel manufacturing sales volumes

-50

50

150

250

350

2005 2006 2007 (E)

Ferrous Tons (Millions)

0

1

2

3

4

5

6

2005 2006 2007 (E)

Trading

Processing

Non Ferrous Pounds (Millions)

5

Significant 2006 Accomplishments-Significant 2006 Accomplishments-Successful IntegrationSuccessful Integration

Completed Four Acquisitions and Committed to FifthCompleted Four Acquisitions and Committed to Fifth

Three of Four Acquisitions Transformed the Business PlatformThree of Four Acquisitions Transformed the Business Platform Metals RecyclingMetals Recycling

Substantially expanded geographic footprintSubstantially expanded geographic footprint

Doubled revenuesDoubled revenues

Significantly increased volume of material processedSignificantly increased volume of material processed

Auto PartsAuto Parts

Doubled RevenuesDoubled Revenues

Increased investment in inventory to improve customer fill ratesIncreased investment in inventory to improve customer fill rates

Closed underperforming full service sitesClosed underperforming full service sites

Centralized administrative functionsCentralized administrative functions

Information TechnologyInformation Technology

Installed common platform for all businessesInstalled common platform for all businesses

Acquisitions accretive ahead of scheduleAcquisitions accretive ahead of schedule

Developed Core Competency In Integration, Setting Stage Developed Core Competency In Integration, Setting Stage for Future Acquisitions for Future Acquisitions

6

Significant 2006 Accomplishments-Significant 2006 Accomplishments-Impressive Financial ResultsImpressive Financial Results

Strong Financial PerformanceStrong Financial Performance Second highest EPS ($4.65) in Company’s historySecond highest EPS ($4.65) in Company’s history Revenues increased by ~$1 billionRevenues increased by ~$1 billion Record operating income in Auto Parts and Steel BusinessesRecord operating income in Auto Parts and Steel Businesses Sequential increase in Metals Recycling Business operating Sequential increase in Metals Recycling Business operating

incomeincome

$0.00

$1.00

$2.00

$3.00

$4.00

$5.00

2003 2004 2005 2006

Revenues (Millions)

0

1000

2000

2003 2004 2005 2006

Earnings Per Share

7

Significant 2006 Accomplishments-Significant 2006 Accomplishments-Improved productivityImproved productivity

Capital investments in technology and infrastructure Capital investments in technology and infrastructure improvements resulted in improved productivity in steel improvements resulted in improved productivity in steel and metals recycling businesses……. and metals recycling businesses…….

Contributed to 17% reduction in processing costs Contributed to 17% reduction in processing costs from first to fourth quarterfrom first to fourth quarter

Resulted in 14% reduction in year over year cost per Resulted in 14% reduction in year over year cost per ton in the Steel Manufacturing Businesston in the Steel Manufacturing Business

8

Growth Drivers for Metals Recycling BusinessGrowth Drivers for Metals Recycling BusinessStrong Industry FundamentalsStrong Industry Fundamentals

Source: 2006 World Steel Dynamics, IISI, and Wall Street ResearchSource: 2006 World Steel Dynamics, IISI, and Wall Street Research

Leads to scrap demand growthLeads to scrap demand growth

0%

20%

40%

60%

80%

100%

1930 1940 1950 1960 1970 1980 1990 2000 2010

Scra

p R

eco

very

Forecast

Demand is robust, Demand is robust, ……but supply remains tightbut supply remains tight

0

250

500

750

1,000

1,250

1,500

1995 2000 2003 2005 2010

Ton

s (m

m)

Total Steel Production EAF Production

Forecasted increase in steel productionForecasted increase in steel production

0

50

100

150

200

250

300

350

400

1975 1979 1991 1995 1999 2003 2007

Total Steel and Electric Arc Furnace (EAF) Production Worldwide Global Scrap Demand

Required Scrap Recovery Rates

9

Growth Drivers for Metals Recycling BusinessGrowth Drivers for Metals Recycling BusinessStrategic Deep Water Ports LocationsStrategic Deep Water Ports Locations

Export FacilityExport Facility Ferrous Recycling FacilityFerrous Recycling Facility

10

Growth Drivers for Metals Recycling Business:Growth Drivers for Metals Recycling Business:Competitive AdvantagesCompetitive Advantages

Strong market position in West Coast and Northeast markets; new Strong market position in West Coast and Northeast markets; new presence in manufacturing rich Southeast marketpresence in manufacturing rich Southeast market

Bi-coastal port facilities provide barrier to entry and ability to access Bi-coastal port facilities provide barrier to entry and ability to access diverse export marketsdiverse export markets

Significant investment in technology drives lower processing costsSignificant investment in technology drives lower processing costs

8.3%7.5%

11.2%

16.6%

0%5%

10%15%20%

Q1 Q2 Q3 Q4

2006 Operating Margin (1)

Average 11.7% (1) Excludes Trading Operation

Competitive advantages reflected in attractive operating margins

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Auto Parts Industry Drivers Underpin GrowthAuto Parts Industry Drivers Underpin Growth

Source: 2005 AAIA Factbook (* - 2005 Estimate)Source: 2005 AAIA Factbook (* - 2005 Estimate)

Aging US Vehicle PopulationAging US Vehicle Population Annual Miles Driven (in Trillions)Annual Miles Driven (in Trillions)

7.5

8.0

8.5

9.0

9.5

10.0

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

Ag

e

Cars Light Trucks

Healthy growth projected for full service and self-service Healthy growth projected for full service and self-service automotive industry segmentsautomotive industry segments

Older vehicles are still on the road, driving more miles, resulting in Older vehicles are still on the road, driving more miles, resulting in higher demand for spare parts to service these older vehicleshigher demand for spare parts to service these older vehicles

2.40

2.50

2.60

2.70

2.80

2.90

3.00

3.10

19

95

19

96

19

97

19

98

19

99

20

00

20

01

20

02

20

03

20

04

20

05

E

20

06

E

Mil

es

(T

rill

ion

s)

12

Schnitzer’s Auto Parts Market PositionSchnitzer’s Auto Parts Market Position

$82$108

$218

$0

$100

$200

2004 2005 2006

Schnitzer is well-positioned within two high growth Schnitzer is well-positioned within two high growth areas of the Used Auto Parts Industryareas of the Used Auto Parts Industry

4.00%

4.70%

0.00%

1.00%

2.00%

3.00%

4.00%

5.00%

Self Serve Full Serve

Full-Service$4-6 billion

Self-Service$1-2 billion

Segment Sales Growth Rates (a)Market Size

(a) Source: 2005 AAIA Factbook (* - 2005 Estimate)(a) Source: 2005 AAIA Factbook (* - 2005 Estimate)

2630

34

0 0

17

0

10

20

30

40

2004 2005 2006

Self-Serve

Full-Serve

Revenues (in millions) Locations

13

2007 Strategic Focus--Continued Growth2007 Strategic Focus--Continued Growth

Increasing operating leverage through productivity improvementsIncreasing operating leverage through productivity improvements

Higher processing volumes to feed mega-shreddersHigher processing volumes to feed mega-shredders

More rapid inventory turnsMore rapid inventory turns

Using scale to drive down costsUsing scale to drive down costs

Focus on customer requirementsFocus on customer requirements

Growth through value-enhancing acquisitionsGrowth through value-enhancing acquisitions

Fragmented markets provide opportunity for further Fragmented markets provide opportunity for further consolidation—disciplined approach based on meeting key consolidation—disciplined approach based on meeting key criteria:criteria:

Strong franchisesStrong franchises

Opportunity to capture value through management or capital Opportunity to capture value through management or capital investmentinvestment

Synergies to existing Auto Parts or Metals Recycling BusinessesSynergies to existing Auto Parts or Metals Recycling Businesses

14

2007 Strategic Focus--Technology2007 Strategic Focus--Technology

Continued investments in technology and improved logisticsContinued investments in technology and improved logistics

Completion of mega-shredder installations (Boston, Completion of mega-shredder installations (Boston, Oakland, Portland) to increase capacity and lower Oakland, Portland) to increase capacity and lower processing costsprocessing costs

Further installation of ferrous and non ferrous sorting Further installation of ferrous and non ferrous sorting systems to improve product quality and recovery of high systems to improve product quality and recovery of high value materialsvalue materials

Continued improvements to major facilities to upgrade Continued improvements to major facilities to upgrade equipment and improve processing flowequipment and improve processing flow

Modifications to reheat furnace and billet yard craneway at Modifications to reheat furnace and billet yard craneway at steel mill to increase capacity steel mill to increase capacity

Strict criteria applied to 2007 budget process to ensure Strict criteria applied to 2007 budget process to ensure discretionary projects provide attractive returnsdiscretionary projects provide attractive returns

33% ROI and 36 month pay-back33% ROI and 36 month pay-back

15

Value Creating InvestmentsValue Creating Investments

Company’s strong balance sheet, operating cash flows and access to Company’s strong balance sheet, operating cash flows and access to capital provide flexibility to pursue multiple options to create valuecapital provide flexibility to pursue multiple options to create value

Accretive acquisitionsAccretive acquisitions

Investments in technologyInvestments in technology

Share repurchase-Board of Directors have approved repurchase of Share repurchase-Board of Directors have approved repurchase of up to 4.7 million shares. No repurchase activity since 2001up to 4.7 million shares. No repurchase activity since 2001

$0

$100

$200

$300

2004 2005 2006

EBITDA

Net Debt

Dollars in Millions

Net Debt/EBITDA

.3 x -- .29 x

16

Overall Management ObjectivesOverall Management Objectives

Industry leader in creating shareholder valueIndustry leader in creating shareholder value

Metals Recycling: product differentiationMetals Recycling: product differentiation

Auto Parts: managing the automobile lifecycleAuto Parts: managing the automobile lifecycle

Steel Manufacturing: productivity and customer satisfactionSteel Manufacturing: productivity and customer satisfaction

Improve productivityImprove productivity

Integration of acquisitionsIntegration of acquisitions

Investment in infrastructureInvestment in infrastructure

Technological enhancementsTechnological enhancements

Seek growthSeek growth

Additional value-creating acquisitionsAdditional value-creating acquisitions

New technologiesNew technologies

17

Investor Highlights-RecapInvestor Highlights-Recap

Significant 2006 AccomplishmentsSignificant 2006 Accomplishments

Positive long-term fundamentals and competitive advantages Positive long-term fundamentals and competitive advantages underpinning business outlookunderpinning business outlook

Management optimistic about 2007 opportunities to create Management optimistic about 2007 opportunities to create shareholder valueshareholder value

18

Appendix: Detailed Business Appendix: Detailed Business Segment Overview Segment Overview

19

Metals Recycling BusinessMetals Recycling Business

~4 million tons of ferrous scrap ~4 million tons of ferrous scrap processed and sold annuallyprocessed and sold annually

>1 million tons sold annually by >1 million tons sold annually by Global Trading Business through Global Trading Business through supplies obtained in Russian and supplies obtained in Russian and Baltic Sea regionBaltic Sea region

One of countries largest One of countries largest exporters of ferrous scrap. Six exporters of ferrous scrap. Six deep water port facilities provide deep water port facilities provide competitive advantage and competitive advantage and barrier to entrybarrier to entry

Bi-coastal operations in 28 cities Bi-coastal operations in 28 cities and 11 statesand 11 states

Strong industry fundamentals Strong industry fundamentals have resulted in a significant have resulted in a significant increase in average prices increase in average prices compared to prior cyclescompared to prior cycles

Positive outlookPositive outlook

20

Used Auto Parts BusinessUsed Auto Parts Business

35 stores35 stores

250,000+ cars processed per year250,000+ cars processed per year

~4 million annual retail customers~4 million annual retail customers

attractive operating marginsattractive operating margins

Complementary to metals recycling Complementary to metals recycling business—source of scrap supplybusiness—source of scrap supply

Full-service Full-service Acquired in Oct 2005Acquired in Oct 2005

17 locations17 locations

Provides great locations and access Provides great locations and access to larger full-service sector of used to larger full-service sector of used parts marketparts market

Self-service

21

Steel Manufacturing BusinessSteel Manufacturing Business

The steel manufacturing business serves as a source of demand for the The steel manufacturing business serves as a source of demand for the Company’s metals recycling business, contributing to vertical integration model Company’s metals recycling business, contributing to vertical integration model

700-800k tons annual capacity for rebar, wire rod and other long steel products700-800k tons annual capacity for rebar, wire rod and other long steel products

Near-term business outlook remains brightNear-term business outlook remains bright

Strong West Coast demand for steel Strong West Coast demand for steel productsproducts

Recent consolidation in West Coast Recent consolidation in West Coast capacity has improved capacity has improved supply/demand balancesupply/demand balance

New state of the art Electric Arc Furnace New state of the art Electric Arc Furnace has increased melt shop capacity and has increased melt shop capacity and improved productivityimproved productivity

Planned improvements in rolling mill will Planned improvements in rolling mill will improve output of finished products, improve output of finished products, provide greater flexibility to meet customer provide greater flexibility to meet customer demand and further improve productivitydemand and further improve productivity