Exhibit 10.2

SECURITY AGREEMENT

THIS SECURITY AGREEMENT (this “Agreement”) is entered into as of April 6, 2016
among Schnitzer Steel Industries, Inc. (the “US Borrower”), the other parties
identified as “Grantors” on the signature pages hereto and such other parties
that may become Grantors hereunder after the date hereof (together with the US
Borrower, each individually a “Grantor”, and collectively, the “Grantors”) and
Bank of America, N.A., in its capacity as administrative agent (the
“Administrative Agent”) for the holders of the Obligations.

RECITALS

WHEREAS, pursuant to that certain Third Amended and Restated Credit Agreement,
dated as of the date hereof (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the “Credit Agreement”), among
the US Borrower, the Canadian Borrowers, the US Lenders, the Canadian Lender,
and Bank of America, N.A., as Administrative Agent, Swing Line Lender and an L/C
Issuer, the US Lenders have agreed to make Committed Loans, the Swing Line
Lender has agreed to make Swing Line Loans, the L/C Issuers have agreed to issue
Letters of Credit, and the Canadian Lender has agreed to make Canadian Loans and
issue Canadian Letters of Credit upon the terms and subject to the conditions
set forth therein; and

WHEREAS, this Agreement is required by the terms of the Credit Agreement.

NOW, THEREFORE, in consideration of these premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:

1.    Definitions.

(a)    Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to such terms in the Credit Agreement.

(b)    The rules of construction specified in Section 1.02 of the Credit
Agreement are incorporated herein mutatis mutandis.

(c)    The following terms shall have the meanings set forth in the UCC (as
defined in the Credit Agreement): Account, Account Debtor, Equipment, Inventory,
and Proceeds.

(d)    In addition, the following term shall have the meaning set forth below:

“Collateral” has the meaning provided in Section 2 hereof.

2.    Grant of Security Interest in the Collateral. To secure the prompt payment
and performance in full when due, whether by lapse of time, acceleration,
mandatory prepayment or otherwise, of the Obligations, each Grantor hereby
grants to the Administrative Agent, for the benefit of the holders of the
Obligations, a continuing security interest in, and a right to set off against,
any and all right, title and interest of such Grantor in and to all of the
following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the “Collateral”): (a) all Accounts; (b) all Equipment;
(c) all Inventory; and (d) all Proceeds of any and all of the foregoing.

Notwithstanding anything to the contrary contained herein, the security
interests granted under this Agreement shall not extend to, and the Collateral
shall not include, Excluded Property.

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The Grantors and the Administrative Agent, on behalf of the holders of the
Obligations, hereby acknowledge and agree that the security interest created
hereby in the Collateral constitutes continuing collateral security for all of
the Obligations, whether now existing or hereafter arising.

Notwithstanding anything in this Agreement to the contrary, (i) neither creation
or perfection of pledges of or security interests in, nor the obtaining of legal
opinions or other deliverables with respect to, particular assets of any Grantor
shall be required, if, and for so long as and to the extent that the
Administrative Agent and the US Borrower agree in writing that the cost of
creating or perfecting such pledges or security interests in such assets, or
obtaining such legal opinions or other deliverables in respect of such assets,
shall be excessive in view of the benefits to be obtained by the holders of the
Obligations therefrom, (ii) Liens required to be granted from time to time shall
be subject to exceptions and limitations set forth in the Collateral Documents
as in effect on the Third Restatement Date, (iii) no perfection actions shall be
required with respect to motor vehicles and other assets subject to certificates
of title and (iv) in no event shall notices be required to be sent to
contractual third parties prior to an enforcement event following the occurrence
and continuation of an Event of Default. The Administrative Agent may grant
extensions of time for the creation and perfection of security interests in or
the obtaining of legal opinions or other deliverables with respect to particular
assets by any Grantor where it determines that such action cannot be
accomplished without undue effort or expense by the time or times at which it
would otherwise be required to be accomplished by this Agreement or the
Collateral Documents. For the avoidance of doubt, no perfection actions shall be
required other than the filing of UCC financing statements or PPSA financing
statements.

3.    Representations and Warranties. Each Grantor hereby represents and
warrants to the Administrative Agent, for the benefit of the holders of the
Obligations, that:

(a)    Ownership. Each Grantor is the legal and beneficial owner of its
Collateral and has the right to pledge, sell, assign or transfer the same.

(b)    Security Interest/Priority. This Agreement creates a valid security
interest in favor of the Administrative Agent, for the benefit of the holders of
the Obligations, in the Collateral of such Grantor and, when properly perfected
by filing, shall constitute a valid and perfected, first priority security
interest in such Collateral, to the extent such security interest can be
perfected by filing under the UCC, free and clear of all Liens except for Liens
permitted pursuant to Section 7.01 of the Credit Agreement.

(c)    Accounts. (i) Each Account of the Grantors and the papers and documents
relating thereto are genuine and in all material respects what they purport to
be, (ii) each Account arises out of (A) a bona fide sale of goods sold and
delivered by such Grantor (or is in the process of being delivered) or (B)
services theretofore actually rendered by such Grantor to, the Account Debtor
named therein, (iii) no surety bond was required or given in connection with any
Account of a Grantor or the contracts or purchase orders out of which they arose
and (iv) the right to receive payment under each Account is assignable.

(d)    Equipment and Inventory. With respect to any Equipment and/or Inventory
of a Grantor with a value in excess of $500,000, each such Grantor has exclusive
possession and control of such Equipment and Inventory of such Grantor except
for (i) Equipment leased by such Grantor as a lessee, (ii) Equipment or
Inventory in transit, (iii) Equipment consisting of rolling stock, bins,
trailers, barges, processing equipment or similar like equipment or (iv)
Equipment and/or Inventory in the possession or control of a warehouseman,
bailee or any agent or processor of such Grantor to

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the extent such Grantor has complied with Section 4(c). Except as otherwise
previously disclosed to the Administrative Agent, no Inventory of a Grantor is
held by a Person other than a Grantor pursuant to consignment, sale or return,
sale on approval or similar arrangement. None of such Inventory is subject to
any licensing, patent, trademark, trade name or copyright with any Person that
restricts any Grantor’s ability to use, manufacture, lease, sell or otherwise
dispose of such Inventory. The completion of the manufacturing process of such
Inventory by a Person other than the applicable Grantor would be permitted under
any contract to which such Grantor is a party or to which the Inventory is
subject. None of the Inventory is subject to a lease agreement.

(e)    Contracts; Agreements; Licenses. No Grantor has any material contracts,
material agreements or material licenses with respect to the Collateral which
are non-assignable by their terms, or as a matter of law, or which prevent the
granting of a security interest therein, other than material contracts,
agreements or licenses with government entities.

(f)    Consents; Etc. No approval, consent, exemption, authorization or other
action by, notice to, or filing with, any Governmental Authority or any other
Person (including, without limitation, any stockholder, member or creditor of
such Grantor), is necessary or required for (i) the grant by such Grantor of the
security interest in the Collateral granted hereby or for the execution,
delivery or performance of this Agreement by such Grantor, (ii) the perfection
of such security interest (to the extent such security interest can be perfected
by filing under the UCC) or (iii) the exercise by the Administrative Agent or
the holders of the Obligations of the rights and remedies provided for in this
Agreement, except for (A) the filing or recording of UCC financing statements,
and (B) consents, authorizations, filings or other actions which have been
obtained or made.

4.    Covenants. Each Grantor covenants that until such time as the Obligations
arising under the Loan Documents have been paid in full and the Commitments have
expired or been terminated, such Grantor shall:

(a)    Maintenance of Perfected Security Interest; Further Information.

(i)    Maintain the security interest created by this Agreement as a first
priority perfected security interest (subject only to Liens permitted pursuant
to Section 7.01 of the Credit Agreement) and defend such security interest
against the claims and demands of all Persons whomsoever (other than the holders
of Liens permitted pursuant to Section 7.01 of the Credit Agreement).

(ii)    From time to time furnish to the Administrative Agent upon the
Administrative Agent’s reasonable request, statements and schedules further
identifying and describing the Collateral of such Grantor and such other reports
in connection therewith as the Administrative Agent may reasonably request, all
in reasonable detail.

(b)    Filing of Financing Statements, Notices, etc. Each Grantor shall execute
and deliver to the Administrative Agent and/or file such agreements, assignments
or instruments (including affidavits, notices, reaffirmations and amendments and
restatements of existing documents, as the Administrative Agent may reasonably
request) and do all such other things as the Administrative Agent may reasonably
deem necessary or appropriate (i) to assure to the Administrative Agent its
security interests hereunder, including such instruments as the Administrative
Agent may from time to time reasonably request in order to perfect and maintain
the security interests granted hereunder in accordance with the UCC, including,
without limitation, financing statements (including

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continuation statements), (ii) to consummate the transactions contemplated
hereby and (iii) to otherwise protect and assure the Administrative Agent of its
rights and interests hereunder. Furthermore, each Grantor also hereby
irrevocably makes, constitutes and appoints the Administrative Agent, its
nominee or any other person whom the Administrative Agent may designate, as such
Grantor’s attorney in fact with full power and for the limited purpose to
prepare and file in the name of such Grantor any financing statements, or
amendments and supplements to financing statements, or renewal financing
statements which in the Administrative Agent’s reasonable discretion would be
necessary or appropriate in order to perfect and maintain perfection of the
security interests granted hereunder, such power, being coupled with an
interest, being and remaining irrevocable until such time as the Obligations
arising under the Loan Documents have been paid in full and the Commitments have
expired or been terminated. Each Grantor hereby agrees that a carbon,
photographic or other reproduction of this Agreement or any such financing
statement is sufficient for filing as a financing statement by the
Administrative Agent without notice thereof to such Grantor wherever the
Administrative Agent may in its sole discretion desire to file the same.

(c)    Collateral Held by Warehouseman, Bailee, etc.

(i)    Upon the reasonable request of the Administrative Agent, with respect to
any Collateral that is at any time in the possession or control of a
warehouseman, bailee or any agent or processor of such Grantor, (A) notify such
Person in writing of the Administrative Agent’s security interest for the
benefit of the holders of the Obligations in such Collateral, (B) instruct such
Person to hold all such Collateral for the Administrative Agent’s account and
subject to the Administrative Agent’s instructions and (C) use reasonable
efforts to obtain (1) a written acknowledgment from such Person that it is
holding such Collateral for the benefit of the Administrative Agent and (2) such
other documentation required by the Administrative Agent (including, without
limitation, subordination and access agreements).

(ii)    Upon the reasonable request of the Administrative Agent, perfect and
protect such Grantor’s ownership interests in all Inventory stored with a
consignee against creditors of the consignee by filing and maintaining financing
statements against the consignee reflecting the consignment arrangement filed in
all appropriate filing offices, providing any written notices required by the
UCC to notify any prior creditors of the consignee of the consignment
arrangement, and taking such other actions as may be appropriate to perfect and
protect such Grantor’s interests in such inventory under Section 2-326, Section
9-103, Section 9-324 and Section 9-505 of the UCC or otherwise, which such
financing statements filed pursuant to this Section shall be assigned to the
Administrative Agent, for the benefit of the holders of the Obligations.

(d)    Inventory. With respect to the Inventory of each Grantor:

(i)    At all times maintain inventory records reasonably satisfactory to the
Administrative Agent, keeping correct and accurate records itemizing and
describing the kind, type, quality and quantity of Inventory and such Grantor’s
cost therefore and daily withdrawals therefrom and additions thereto.

(ii)    Produce, use, store and maintain the Inventory with all reasonable care
and caution and in accordance with applicable standards of any insurance and in
conformity with applicable Laws.

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(iii)    Such Grantor shall not, at any time, permit any Inventory to be subject
to a lease agreement.

(e)    Treatment of Accounts. None of the Grantors will, without the
Administrative Agent’s prior written consent, grant or extend the time for
payment of any Account, or compromise or settle any Account for less than the
full amount thereof, or release any person or property, in whole or in part,
from payment thereof, or allow any credit or discount thereon, other than as (i)
normal and customary in the ordinary course of a Grantor’s business and (ii) as
permitted under the Credit Agreement.

(f)    Books and Records. Mark its books and records to reflect the security
interest granted pursuant to this Agreement.

(g)    Nature of Collateral. At all times maintain the Collateral as personal
property and not affix any of the Collateral to any real property in a manner
which would change its nature from personal property to real property.

5.    Authorization to File Financing Statements. Each Grantor hereby authorizes
the Administrative Agent to prepare and file such financing statements
(including continuation statements) or amendments thereof or supplements thereto
or other instruments as the Administrative Agent may from time to time deem
necessary or appropriate in order to perfect and maintain the security interests
granted hereunder in accordance with the UCC (including authorization to
describe the Collateral).

6.    Advances. On failure of any Grantor to perform any of the covenants and
agreements contained herein or in any other Loan Document, the Administrative
Agent may, at its sole option and in its sole discretion, after ten (10)
business days prior written notice to each applicable Grantor and opportunity to
cure, perform the same and in so doing may expend such sums as the
Administrative Agent may reasonably deem advisable in the performance thereof,
including, without limitation, the payment of any insurance premiums, the
payment of any taxes, a payment to obtain a release of a Lien or potential Lien,
expenditures made in defending against any adverse claim and all other
expenditures which the Administrative Agent may make for the protection of the
security hereof or which may be compelled to make by operation of Law. All such
sums and amounts so expended shall be repayable by the Grantors on a joint and
several basis promptly upon timely notice thereof and demand therefor, shall
constitute additional Obligations and shall bear interest from the date said
amounts are expended at the Default Rate. No such performance of any covenant or
agreement by the Administrative Agent on behalf of any Grantor, and no such
advance or expenditure therefor, shall relieve the Grantors of any Default or
Event of Default. The Administrative Agent may make any payment hereby
authorized in accordance with any bill, statement or estimate procured from the
appropriate public office or holder of the claim to be discharged without
inquiry into the accuracy of such bill, statement or estimate or into the
validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by a Grantor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.

7.    Remedies.

(a)    General Remedies. Upon the occurrence of an Event of Default and during
the continuation thereof, the Administrative Agent, on behalf of the holders of
the Obligations, shall have, in addition to the rights and remedies provided
herein, in the Loan Documents, in any other documents relating to the
Obligations, or by any applicable Law (including, but not limited to, levy

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of attachment, garnishment and the rights and remedies set forth in the UCC of
the jurisdiction applicable to the affected Collateral), the rights and remedies
of a secured party under the UCC (regardless of whether the UCC is the law of
the jurisdiction where the rights and remedies are asserted and regardless of
whether the UCC applies to the affected Collateral), and further, the
Administrative Agent may, with or without judicial process or the aid and
assistance of others, (i) enter on any premises on which any of the Collateral
may be located and, without resistance or interference by the Grantors, take
possession of the Collateral, (ii) dispose of any Collateral on any such
premises, (iii) require the Grantors to assemble and make available to the
Administrative Agent at the expense of the Grantors any Collateral at any place
and time designated by the Administrative Agent which is reasonably convenient
to both parties, (iv) remove any Collateral from any such premises for the
purpose of effecting sale or other disposition thereof, and/or (v) without
demand and without advertisement, notice, hearing or process of law, all of
which each of the Grantors hereby waives to the fullest extent permitted by Law,
at any place and time or times, sell, lease, assign, give option or options to
purchase, or otherwise dispose of and deliver the Collateral or any part thereof
(or contract to do any of the foregoing), in one or more parcels any or all
Collateral held by or for it at public or private sale, at any exchange or
broker’s board or elsewhere, by one or more contracts, in one or more parcels,
for money, upon credit or otherwise, at such prices and upon such terms as the
Administrative Agent deems advisable, in its sole discretion (subject to any and
all mandatory legal requirements). Each Grantor acknowledges that any such
private sale may be at prices and on terms less favorable to the seller than the
prices and other terms which might have been obtained at a public sale and,
notwithstanding the foregoing, agrees that such private sale shall be deemed to
have been made in a commercially reasonable manner. Neither the Administrative
Agent’s compliance with applicable Law nor its disclaimer of warranties relating
to the Collateral shall be considered to adversely affect the commercial
reasonableness of any sale. To the extent the rights of notice cannot be legally
waived hereunder, each Grantor agrees that any requirement of reasonable notice
shall be met if such notice, specifying the place of any public sale or the time
after which any private sale is to be made, is personally served on or mailed,
postage prepaid, to the US Borrower in accordance with the notice provisions of
Section 10.02 of the Credit Agreement at least ten (10) days before the time of
sale or other event giving rise to the requirement of such notice. The
Administrative Agent may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned. The
Administrative Agent shall not be obligated to make any sale or other
disposition of the Collateral regardless of notice having been given. To the
extent permitted by applicable Law, any holder of the Obligations may be a
purchaser at any such sale. To the extent permitted by applicable Law, each of
the Grantors hereby waives all of its rights of redemption with respect to any
such sale. Subject to the provisions of applicable Law, the Administrative Agent
may postpone or cause the postponement of the sale of all or any portion of the
Collateral by announcement at the time and place of such sale, and such sale
may, without further notice, to the extent permitted by Law, be made at the time
and place to which the sale was postponed, or the Administrative Agent may
further postpone such sale by announcement made at such time and place.

(b)    Remedies Relating to Accounts.

(i)    Upon the occurrence of an Event of Default and during the continuation
thereof, whether or not the Administrative Agent has exercised any or all of its
rights and remedies hereunder, (A) promptly upon the reasonable request of the
Administrative Agent, each Grantor shall instruct all Account Debtors to remit
all payments in respect of Accounts to a mailing location selected by the
Administrative Agent and (B) the Administrative Agent

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shall have the right to enforce any Grantor’s rights against its customers and
Account Debtors, and the Administrative Agent or its designee may notify any
Grantor’s customers and Account Debtors that the Accounts of such Grantor have
been assigned to the Administrative Agent or of the Administrative Agent’s
security interest therein, and may (either in its own name or in the name of a
Grantor or both) demand, collect (including without limitation by way of a
lockbox arrangement), receive, take receipt for, sell, sue for, compound,
settle, compromise and give acquittance for any and all amounts due or to become
due on any Account, and, in the Administrative Agent’s discretion, file any
claim or take any other action or proceeding to protect and realize upon the
security interest of the holders of the Obligations in the Accounts.

(ii)    Upon the occurrence of an Event of Default and during the continuation
thereof, each Grantor acknowledges and agrees that the Proceeds of its Accounts
remitted to or on behalf of the Administrative Agent in accordance with the
provisions hereof shall be solely for the Administrative Agent’s own convenience
and that such Grantor shall not have any right, title or interest in such
Accounts or in any such other amounts except as expressly provided herein.
Neither the Administrative Agent nor the holders of the Obligations shall have
any liability or responsibility to any Grantor for acceptance of a check, draft
or other order for payment of money bearing the legend “payment in full” or
words of similar import or any other restrictive legend or endorsement or be
responsible for determining the correctness of any remittance.

(iii)    Upon the occurrence of an Event of Default and during the continuation
thereof, (A) the Administrative Agent shall have the right, but not the
obligation, to make test verifications of the Accounts in any manner and through
any medium that it reasonably considers advisable, and the Grantors shall
furnish all such assistance and information as the Administrative Agent may
require in connection with such test verifications, (B) upon the Administrative
Agent’s request and at the expense of the Grantors, the Grantors shall cause
independent public accountants or others satisfactory to the Administrative
Agent to furnish to the Administrative Agent reports showing reconciliations,
aging and test verifications of, and trial balances for, the Accounts and (C)
the Administrative Agent in its own name or in the name of others may
communicate with Account Debtors on the Accounts to verify with them to the
Administrative Agent’s satisfaction the existence, amount and terms of any
Accounts.

(c)    Access. In addition to the rights and remedies hereunder, upon the
occurrence of an Event of Default and during the continuation thereof, the
Administrative Agent shall have the right to enter and remain upon the various
premises of the Grantors without cost or charge to the Administrative Agent, and
use the same, together with materials, supplies, books and records of the
Grantors for the purpose of collecting and liquidating the Collateral, or for
preparing for sale and conducting the sale of the Collateral, whether by
foreclosure, auction or otherwise. In addition, the Administrative Agent may
remove Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral.

(d)    Nonexclusive Nature of Remedies. Failure by the Administrative Agent or
the holders of the Obligations to exercise any right, remedy or option under
this Agreement, any other Loan Document, any other document relating to the
Obligations, or as provided by Law, or any delay by the Administrative Agent or
the holders of the Obligations in exercising the same, shall not operate as a
waiver of any such right, remedy or option. No waiver hereunder shall be
effective unless it is

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in writing, signed by the party against whom such waiver is sought to be
enforced and then only to the extent specifically stated, which in the case of
the Administrative Agent or the holders of the Obligations shall only be granted
as provided herein. To the extent permitted by Law, neither the Administrative
Agent, the holders of the Obligations, nor any party acting as attorney for the
Administrative Agent or the holders of the Obligations, shall be liable
hereunder for any acts or omissions or for any error of judgment or mistake of
fact or law other than their gross negligence or willful misconduct hereunder as
determined by a final non-appealable judgment of a court of competent
jurisdiction. The rights and remedies of the Administrative Agent and the
holders of the Obligations under this Agreement shall be cumulative and not
exclusive of any other right or remedy which the Administrative Agent or the
holders of the Obligations may have.

(e)    Retention of Collateral. In addition to the rights and remedies
hereunder, the Administrative Agent may, in compliance with Sections 9-620 and
9-621 of the UCC or otherwise complying with the requirements of applicable Law
of the relevant jurisdiction, accept or retain the Collateral in satisfaction of
the Obligations. Unless and until the Administrative Agent shall have provided
such notices, however, the Administrative Agent shall not be deemed to have
retained any Collateral in satisfaction of any Obligations for any reason.

(f)    Waiver; Deficiency. Each Grantor hereby waives, to the extent permitted
by applicable Laws, all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable Laws in
order to prevent or delay the enforcement of this Agreement or the absolute sale
of the Collateral or any portion thereof. In the event that the proceeds of any
sale, collection or realization are insufficient to pay all amounts to which the
Administrative Agent or the holders of the Obligations are legally entitled, the
Grantors shall be jointly and severally liable for the deficiency, together with
interest thereon at the Default Rate, together with the costs of collection and
the fees, charges and disbursements of counsel. Any surplus remaining after the
full payment and satisfaction of the Obligations shall be returned to the
Grantors or to whomsoever a court of competent jurisdiction shall determine to
be entitled thereto.

8.    Rights of the Administrative Agent.

(a)    Power of Attorney. In addition to other powers of attorney contained
herein, each Grantor hereby designates and appoints the Administrative Agent, on
behalf of the holders of the Obligations, and each of its designees or agents,
as attorney-in-fact of such Grantor, irrevocably and with power of substitution,
with authority to take any or all of the following actions upon the occurrence
of an Event of Default and during the continuation thereof:

(i)    to demand, collect, settle, compromise, adjust, give discharges and
releases, all as the Administrative Agent may reasonably determine in respect of
or arising out of the Collateral;

(ii)    to commence and prosecute any actions at any court for the purposes of
collecting any Collateral and enforcing any other right in respect thereof;

(iii)    to defend, settle or compromise any action brought and, in connection
therewith, give such discharge or release as the Administrative Agent may deem
reasonably appropriate in respect of or arising out of the Collateral;

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(iv)    to receive, open and dispose of mail addressed to a Grantor and endorse
checks, notes, drafts, acceptances, money orders, bills of lading, warehouse
receipts or other instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such Grantor on behalf of
and in the name of such Grantor, or securing, or relating to such Collateral;

(v)    to sell, assign, transfer, make any agreement in respect of, or otherwise
deal with or exercise rights in respect of, any Collateral or the goods or
services which have given rise thereto, as fully and completely as though the
Administrative Agent were the absolute owner thereof for all purposes;

(vi)    to adjust and settle claims under any insurance policy relating thereto;

(vii)    to execute and deliver all assignments, conveyances, statements,
financing statements, continuation financing statements, security agreements,
affidavits, notices and other agreements, instruments and documents that the
Administrative Agent may determine necessary in order to perfect and maintain
the security interests and liens granted in this Agreement and in order to fully
consummate all of the transactions contemplated herein in respect of or arising
out of the Collateral;

(viii)    to institute any foreclosure proceedings that the Administrative Agent
may deem appropriate in respect of or arising out of the Collateral;

(ix)    to sign and endorse any drafts, assignments, proxies, verifications,
notices and other documents relating to the Collateral;

(x)    to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral;

(xi)    to direct any parties liable for any payment in connection with any of
the Collateral to make payment of any and all monies due and to become due
thereunder directly to the Administrative Agent or as the Administrative Agent
shall direct;

(xii)    to receive payment of and receipt for any and all monies, claims, and
other amounts due and to become due at any time in respect of or arising out of
any Collateral; and

(xiii)    to do and perform all such other acts and things as the Administrative
Agent may reasonably deem to be necessary, proper or convenient in connection
with the Collateral.

This power of attorney is a power coupled with an interest and shall be
irrevocable until such time as the Obligations arising under the Loan Documents
have been paid in full and the Commitments have expired or been terminated. The
Administrative Agent shall be under no duty to exercise or withhold the exercise
of any of the rights, powers, privileges and options expressly or implicitly
granted to the Administrative Agent in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. The Administrative Agent
shall not be liable for any act or omission or for any error of judgment or any
mistake of fact or law in its individual capacity or its capacity as
attorney-in-fact except acts or omissions resulting from its gross negligence or
willful misconduct as determined by a final non-appealable judgment of a court
of competent jurisdiction. This power

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of attorney is conferred on the Administrative Agent solely to protect, preserve
and realize upon its security interest in the Collateral and shall not impose
any duty upon the Administrative Agent or any other holder of the Obligations to
exercise any such powers.

(b)    Assignment by the Administrative Agent. The Administrative Agent may from
time to time assign the Obligations to a successor Administrative Agent
appointed in accordance with the Credit Agreement, and such successor shall be
entitled to all of the rights and remedies of the Administrative Agent under
this Agreement in relation thereto.

(c)    The Administrative Agent’s Duty of Care. Other than the exercise of
reasonable care to assure the safe custody of the Collateral while being held by
the Administrative Agent hereunder, the Administrative Agent shall have no duty
or liability to preserve rights pertaining thereto, it being understood and
agreed that the Grantors shall be responsible for preservation of all rights in
the Collateral, and the Administrative Agent shall be relieved of all
responsibility for the Collateral upon surrendering it or tendering the
surrender of it to the Grantors. The Administrative Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Collateral
in its possession if the Collateral is accorded treatment substantially equal to
that which the Administrative Agent accords its own property, which shall be no
less than the treatment employed by a reasonable and prudent agent in the
industry, it being understood that the Administrative Agent shall not have
responsibility for taking any necessary steps to preserve rights against any
parties with respect to any of the Collateral. In the event of a public or
private sale of Collateral pursuant to Section 7 hereof, the Administrative
Agent shall have no responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relating to any Collateral, whether or not the Administrative Agent has or is
deemed to have knowledge of such matters, or (ii) taking any steps to clean,
repair or otherwise prepare the Collateral for sale.

(d)    Liability with Respect to Accounts. Anything herein to the contrary
notwithstanding, each of the Grantors shall remain liable under each of the
Accounts to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of any
agreement giving rise to each such Account. Neither the Administrative Agent nor
any holder of the Obligations shall have any obligation or liability under any
Account (or any agreement giving rise thereto) by reason of or arising out of
this Agreement or the receipt by the Administrative Agent or any holder of the
Obligations of any payment relating to such Account pursuant hereto, nor shall
the Administrative Agent or any holder of the Obligations be obligated in any
manner to perform any of the obligations of a Grantor under or pursuant to any
Account (or any agreement giving rise thereto), to make any payment, to make any
inquiry as to the nature or the sufficiency of any payment received by it or as
to the sufficiency of any performance by any party under any Account (or any
agreement giving rise thereto), to present or file any claim, to take any action
to enforce any performance or to collect the payment of any amounts which may
have been assigned to it or to which it may be entitled at any time or times.

(e)    Releases of Collateral. If any Collateral shall be sold, transferred or
otherwise disposed of by any Grantor in a transaction permitted by the Credit
Agreement, then the Administrative Agent, at the request and sole expense of
such Grantor, shall promptly execute and deliver to such Grantor all releases
and other documents, and take such other action, reasonably necessary for the
release of the Liens created hereby or by any other Collateral Document on such
Collateral.

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9.    Application of Proceeds. Upon the acceleration of the Obligations pursuant
to Section 8.02 of the Credit Agreement, any payments in respect of the
Obligations and any proceeds of the Collateral, when received by the
Administrative Agent or any holder of the Obligations in cash or cash
equivalents will be applied in reduction of the Obligations in the order set
forth in Section 8.03 of the Credit Agreement.
    
10.    Continuing Agreement.

(a)    This Agreement shall remain in full force and effect until such time as
the Obligations arising under the Loan Documents have been paid in full and the
Commitments have expired or been terminated, at which time this Agreement shall
be automatically terminated (other than obligations under this Agreement which
expressly survive such termination) and the Administrative Agent shall, upon the
request and at the expense of the Grantors, forthwith release all of its liens
and security interests hereunder and shall execute and deliver all UCC
termination statements and/or other documents reasonably requested by the
Grantors evidencing such termination.

(b)    This Agreement shall continue to be effective or be automatically
reinstated, as the case may be, if at any time payment, in whole or in part, of
any of the Obligations is rescinded or must otherwise be restored or returned by
the Administrative Agent or any holder of the Obligations as a preference,
fraudulent conveyance or otherwise under any Debtor Relief Law, all as though
such payment had not been made; provided that in the event payment of all or any
part of the Obligations is rescinded or must be restored or returned, all
reasonable costs and expenses (including without limitation any reasonable legal
fees and disbursements) incurred by the Administrative Agent or any holder of
the Obligations in defending and enforcing such reinstatement shall be deemed to
be included as a part of the Obligations.

11.    Amendments; Waivers; Modifications, etc. This Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 10.01 of the Credit Agreement.

12.    Successors in Interest. This Agreement shall be binding upon each
Grantor, its successors and assigns and shall inure, together with the rights
and remedies of the Administrative Agent and the holders of the Obligations
hereunder, to the benefit of the Administrative Agent and the holders of the
Obligations and their successors and permitted assigns.

13.    Notices. All notices required or permitted to be given under this
Agreement shall be in conformance with Section 10.02 of the Credit Agreement.

14.    Counterparts. This Agreement may be executed in any number of
counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Agreement to produce or account
for more than one such counterpart. Delivery of an executed counterpart of a
signature page of this Agreement by fax transmission or other electronic mail
transmission (e.g. “pdf” or “tif”) shall be effective as delivery of a manually
executed counterpart of this Agreement.

15.    Headings. The headings of the sections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Agreement.

16.    Governing Law; Submission to Jurisdiction; Waiver of Venue; Waiver of
Jury Trial. The terms of Sections 10.14 and 10.15 of the Credit Agreement with
respect to governing law, submission to

11

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jurisdiction, waiver of venue and waiver of jury trial are incorporated herein
by reference, mutatis mutandis, and the parties hereto agree to such terms.

17.    Severability. If any provision of this Agreement is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.

18.    Entirety. This Agreement, the other Loan Documents and any separate
letter agreements with respect to fees payable to the Administrative Agent or
the L/C Issuers constitute the entire contract among the parties relating to the
subject matter hereof and supersede any and all previous agreements and
understandings, oral or written, relating to the subject matter hereof.

19.    Other Security. To the extent that any of the Obligations are now or
hereafter secured by property other than the Collateral (including, without
limitation, real property and securities owned by a Grantor), or by a guarantee,
endorsement or property of any other Person, then the Administrative Agent shall
have the right to proceed against such other property, guarantee or endorsement
upon the occurrence of any Event of Default and during the continuation thereof,
and the Administrative Agent shall have the right, in its sole discretion, to
determine which rights, security, liens, security interests or remedies the
Administrative Agent shall at any time pursue, relinquish, subordinate, modify
or take with respect thereto, without in any way modifying or affecting any of
them or the Obligations or any of the rights of the Administrative Agent or the
holders of the Obligations under this Agreement, under any other of the Loan
Documents or under any other document relating to the Obligations.

20.    Joinder. At any time after the date of this Agreement, one or more
additional Persons may become party hereto by executing and delivering to the
Administrative Agent a Joinder Agreement. Immediately upon such execution and
delivery of such Joinder Agreement (and without any further action), each such
additional Person will become a party to this Agreement as a “Grantor” and have
all of the rights and obligations of a Grantor hereunder and this Agreement
shall be deemed amended by such Joinder Agreement.

21.    Joint and Several Obligations of Grantors.

(a)    Each of the Grantors is accepting joint and several liability hereunder
in consideration of the financial accommodations to be provided by the Lenders
under the Credit Agreement, for the mutual benefit, directly and indirectly, of
each of the Grantors and in consideration of the undertakings of each of the
Grantors to accept joint and several liability for the obligations of each of
them.

(b)    Each of the Grantors jointly and severally hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a primary obligor,
joint and several liability with the other Grantors with respect to the payment
and performance of all of the Obligations, it being the intention of the parties
hereto that (i) all the Obligations shall be the joint and several obligations
of each of the Grantors without preferences or distinction among them and (ii) a
separate action may be brought against each Grantor to enforce this Agreement
whether or not any Borrower, any other Grantor or any other person or entity is
joined as a party.

(c)    Notwithstanding any provision to the contrary contained herein, in any
other of the Loan Documents, to the extent the obligations of a Grantor shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal

12

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law relating to fraudulent conveyances or transfers) then the obligations of
such Grantor hereunder shall be limited to the maximum amount that is
permissible under applicable law (whether federal or state and including,
without limitation, Debtor Relief Laws).

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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Each of the parties hereto has caused a counterpart of this Agreement to be duly
executed and delivered as of the date first above written.

GRANTORS:                SCHNITZER STEEL INDUSTRIES, INC.,
an Oregon corporation
By:/s/Peter B. Saba                
Name:    Peter B. Saba
Title:    Senior Vice President

AUTO PARTS GROUP SOUTHWEST, LLC,
a Delaware limited liability company
By:/s/Steven Heiskell            
Name:    Steven Heiskell
Title:    President

CASCADE STEEL ROLLING MILLS, INC.,
an Oregon corporation
By:/s/Richard D. Peach                
Name:    Richard D. Peach
Title:    Treasurer

EDMAN CORP.,
an Oregon corporation
By:/s/Richard D. Peach                
Name:    Richard D. Peach
Title:    Treasurer

GENERAL METALS OF TACOMA, INC.,
a Washington corporation
By:/s/Richard D. Peach                
Name:    Richard D. Peach
Title:    Treasurer

JOINT VENTURE OPERATIONS, INC.,
a Delaware corporation
By:/s/W. Brandon Peele            
Name:    W. Brandon Peele
Title:    Treasurer

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

--------------------------------------------------------------------------------

MANUFACTURING MANAGEMENT, INC.,
an Oregon corporation
By:/s/Richard D. Peach                
Name:    Richard D. Peach
Title:    Treasurer

METALS RECYCLING L.L.C.,
a Rhode Island limited liability company
By: Joint Venture Operations, Inc.
Its: Sole Member

By:/s/W. Brandon Peele                
Name:    W. Brandon Peele
Title:    Treasurer

NORPROP, INC.,
an Oregon corporation
By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK A PART, INC.,
a Washington corporation
By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK AND PULL AUTO DISMANTLING, INC.,
a California corporation
By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

--------------------------------------------------------------------------------

PICK-N-PULL AUTO DISMANTLERS, A CALIFORNIA GENERAL PARTNERSHIP,
a California general partnership
By: Norprop, Inc.
Its: General Partner

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK-N-PULL AUTO DISMANTLERS, COLUMBUS, LLC,
a Delaware limited liability company
By: Norprop, Inc.
Its: Sole Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK-N-PULL AUTO DISMANTLERS, KANSAS CITY, LLC,
a Delaware limited liability company
By: Norprop, Inc.
Its: Sole Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK-N-PULL AUTO DISMANTLERS, LLC,
a California limited liability company
By: Norprop, Inc.
Its: Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

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PICK-N-PULL AUTO DISMANTLERS, NEVADA, LLC,
a Nevada limited liability company
By: Norprop, Inc.
Its: Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK-N-PULL AUTO DISMANTLERS, ST. LOUIS, LLC,
a Delaware limited liability company
By: Norprop, Inc.
Its: Sole Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK-N-PULL AUTO DISMANTLERS, STOCKTON, LLC,
a California limited liability company
By: Norprop, Inc.
Its: Sole Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PICK-N-PULL AUTO DISMANTLERS, VIRGINIA BEACH, LLC,
a Delaware limited liability company
By: Norprop, Inc.
Its: Sole Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

--------------------------------------------------------------------------------

PICK-N-PULL NORTHWEST, LLC,
an Oregon limited liability company
By: Norprop, Inc.
Its: Member

By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

PROLERIDE TRANSPORT SYSTEMS, INC.,
a Delaware corporation
By:/s/Michael R. Henderson            
Name:    Michael R. Henderson
Title:    President

PROLERIZED NEW ENGLAND COMPANY LLC,
a Delaware limited liability company
By: Proleride Transport Systems, Inc.
Its: Managing Member

By:/s/Michael R. Henderson            
Name:    Michael R. Henderson
Title:    President

ROW52, LLC,
a Delaware limited liability company
By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

SCHNITZER FRESNO, INC.,
an Oregon corporation
By:/s/Richard D. Peach                
Name:    Richard D. Peach
Title:    Treasurer

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

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SCHNITZER SOUTHEAST, LLC,
a Georgia limited liability company
By: Schnitzer Steel Industries, Inc.
Its: Manager

By:/s/ Peter B. Saba                
Name:    Peter B. Saba
Title:    Senior Vice President

SCHNITZER STEEL HAWAII CORP.,
a Delaware corporation
By:/s/Richard D. Peach                
Name:    Richard D. Peach
Title:    Treasurer

SSI BIG SKY LLC,
an Oregon limited liability company
By: Schnitzer Steel Industries, Inc.
Its: Sole Member

By:/s/ Peter B. Saba                
Name:    Peter B. Saba
Title:    Senior Vice President

SSI BURBANK LLC,
a Washington limited liability company
By: Schnitzer Steel Industries, Inc.
Its: Sole Member

By:/s/ Peter B. Saba                
Name:    Peter B. Saba
Title:    Senior Vice President

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

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SSI NEVADA LLC,
a Nevada limited liability company
By: Schnitzer Steel Industries, Inc.
Its: Sole Member

By:/s/Peter B. Saba                
Name:    Peter B. Saba
Title:    Senior Vice President

U-PULL-IT, INC.,
a California corporation
By:/s/Steven Heiskell                
Name:    Steven Heiskell
Title:    President

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT

--------------------------------------------------------------------------------

Accepted and agreed to as of the date first above written.

BANK OF AMERICA, N.A.,
as Administrative Agent

By:/s/Anthea Del Bianco            
Name:    Anthea Del Bianco
Title:    Vice President

SCHNITZER STEEL INDUSTRIES, INC.
SECURITY AGREEMENT