Separation of Hugo Neu and Schnitzer Steel completed

Portland, OR— Schnitzer Steel Industries, Inc. 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.

Under the joint venture Master Agreement, Schnitzer received:

— The assets and related liabilities of Hugo Neu Schnitzer 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, 2010.

— 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 adjustments.

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 assets.

— The portions of Hugo Neu Schnitzer 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 www.schnitzersteel.com. In summary, the objective of the separation was to provide each partner with an equitable portion of the various joint operations.