<PAGE>   1

                                                                    EXHIBIT 10.6

                                 AMENDMENT NO. 5
                                       TO
                                CREDIT AGREEMENT


         THIS AMENDMENT NO. 5 TO CREDIT AGREEMENT ("AMENDMENT") is dated as of
April 14, 1998, by and among METAL MANAGEMENT, INC., a Delaware corporation
("MTLM"), each of the corporations and other entities set forth on ANNEX 1
hereto (MTLM and each of such corporations and other entities sometimes
hereinafter are referred to individually as a "BORROWER" and collectively as
"BORROWERS"); MTLM, acting in its capacity as funds administrator for itself and
the other Borrowers (in such capacity, the "FUNDS ADMINISTRATOR"); BT COMMERCIAL
CORPORATION, a Delaware corporation (in its individual capacity, hereinafter
referred to as "BTCC") and the other financial institutions signatories hereto
as lenders (BTCC and each of such other financial institutions hereinafter are
referred to individually as a "LENDER" and collectively as "LENDERS"); and BTCC,
acting in its capacity as agent (in such capacity, hereinafter referred to as
the "AGENT") for itself and the other Lenders. Capitalized terms used herein but
not otherwise defined herein shall have the respective meanings assigned to such
terms in the Credit Agreement.


                                   WITNESSETH:

         WHEREAS, the Borrowers, the Funds Administrator, the Agent and the
Lenders have entered into that certain Credit Agreement dated as of March 31,
1998, as amended (the "CREDIT AGREEMENT"), pursuant to which the Lenders have
agreed to make certain loans and other financial accommodations to or for the
account of the Borrowers;

         WHEREAS, the respective Borrowers have requested that the Agent and the
Lenders further amend the Credit Agreement; and

         WHEREAS, the Agent and the Lenders have agreed to further amend the
Credit Agreement on the terms and subject to the conditions hereinafter set
forth;

         NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
respective parties hereto hereby agree as follows:



<PAGE>   2


         1.    AMENDMENT TO CREDIT AGREEMENT. Effective as of the date hereof,
upon satisfaction of the conditions precedent set forth in SECTION 2 below, and
in reliance upon the representations and warranties of the respective Borrowers
and the Funds Administrator set forth herein, the Credit Agreement is hereby
amended as follows:

         1.1   The Credit Agreement is hereby amended by deleting therefrom
SECTION 8.2 in its entirety and substituting therefor the following language:

                  8.2      CAPITAL EXPENDITURES.

                  The Borrowers shall not permit Capital Expenditures for the
         Consolidated Entity to exceed (A) $21,000,000 for the fiscal year
         ending March 31, 1999 and (B) for the fiscal year ending March 31, 2000
         and each fiscal year thereafter, Consolidated Revenues for such fiscal
         year MULTIPLIED BY two percent (2.00%); PROVIDED, that, notwithstanding
         the foregoing, Borrowers' compliance with this SECTION 8.2 shall be
         determined without giving effect to (I) any Capital Expenditure
         (including operating lease buyouts) made during the month of April,
         1998, with the proceeds of Indebtedness evidenced by the Credit
         Documents or the Subordinated Notes and (II) any Capital Expenditure
         made after the Closing Date with Equity Offering Proceeds constituting
         Unallocated Equity Proceeds at the time such Capital Expenditure was
         made; PROVIDED, FURTHER, that, concurrently with the making of any
         Capital Expenditure with Unallocated Equity Offering Proceeds, the
         Funds Administrator shall have delivered to the Agent an Equity
         Offering Proceeds Allocation Certificate with respect thereto.

         1.2   SECTION 8.7 of the Credit Agreement is hereby amended by deleting
therefrom SUBCLAUSE (V)(2) in its entirety and substituting therefor the
following language:

                  (2) commencing with the payment due and payable November 15,
         1999 and for each interest payment thereafter, during the thirty (30)
         day period ending on the date on which such interest payment is made,
         there shall have been, on average, unused availability under the
         Borrowing Base of no less than the sum of (X) the amount of such
         interest payment and (Y) $12,000,000; and


                                      -2-

<PAGE>   3


         1.3   The Credit Agreement is hereby amended by inserting the following
language after SECTION 8.12:

                  8.13     BORROWING BASE AVAILABILITY.

                  The Borrowers shall not permit availability under the
Borrowing Base, on average for the Business Days during the period commencing
May 25, 1999 through June 7, 1999, to be less than $12,000,000.

         2.    CONDITIONS PRECEDENT. This Amendment shall become effective as of
the date hereof, upon satisfaction of each of the following conditions:

                  (A) the Agent shall have received six (6) copies of this
         Amendment, duly executed by the Majority Lenders, each of the Borrowers
         and the Funds Administrator; and

                  (B) the Agent shall have received in immediately available
         funds for the ratable account of the Lenders a fee in the amount of
         $250,000.

         3.    REPRESENTATIONS, WARRANTIES AND COVENANTS.

                  3.1   Each of the Borrowers and the Funds Administrator hereby
         represents and warrants to the Agent and each of the Lenders that,
         after giving effect to this Amendment:

                           (A) All representations and warranties contained in
                  the Credit Agreement and the other Credit Documents are true
                  and correct in all material respects on and as of the date of
                  this Amendment, in each case as if then made, other than
                  representations and warranties that expressly relate solely to
                  an earlier date (in which case such representations and
                  warranties remain true and accurate on and as of such earlier
                  date);

                           (B) No Default or Event of Default has occurred which
                  is continuing;

                           (C) This Amendment, and the Credit Agreement, as
                  amended hereby, constitute legal, valid and binding
                  obligations of the Borrowers and the Funds Administrator,
                  respectively, and are enforceable against each of the



                                      -3-

<PAGE>   4

                  Borrowers and the Funds Administrator in accordance with their
                  respective terms; and

                           (D) The execution and delivery by the Borrowers and
                  the Funds Administrator of this Amendment does not require the
                  consent or approval of any Person, except such consents and
                  approvals as have been obtained.

         4. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE OTHER CREDIT
DOCUMENTS.

                  4.1 Upon the effectiveness of this Amendment, each reference
         in the Credit Agreement to "this Agreement", "hereunder", "hereof",
         "herein" or words of like import, and each reference in each of the
         other Credit Documents to the "Credit Agreement" shall in each case
         mean and be a reference to the Credit Agreement as amended hereby.

                  4.2 Except as expressly set forth herein, (I) the execution
         and delivery of this Amendment shall in no way affect any of the
         respective rights, powers or remedies of the Agent or any of the
         Lenders with respect to any Event of Default nor constitute a waiver of
         any provision of the Credit Agreement or any of the other Credit
         Documents and (II) all of the respective terms and provisions of the
         Credit Agreement, the other Credit Documents and all other documents,
         instruments, amendments and agreements executed and/or delivered by any
         of the Borrowers and/or the Funds Administrator pursuant thereto or in
         connection therewith shall remain in full force and effect and are
         hereby ratified and confirmed in all respects. The execution and
         delivery of this Amendment by the Agent and each of the Lenders shall
         in no way obligate the Agent or any of the Lenders, at any time
         hereafter, to consent to any other amendment or modification of any
         term or provision of the Credit Agreement or any of the other Credit
         Documents, whether of a similar or different nature.

         5. GOVERNING LAW. THE VALIDITY, INTERPRETATION AND ENFORCEMENT OF THIS
AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL
LAWS AND DECISIONS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS
PRINCIPLES.



                                      -4-

<PAGE>   5

         6. HEADINGS. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.

         7. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties hereto in separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. Any such counterpart
which may be delivered by facsimile transmission shall be deemed the equivalent
of an originally signed counterpart and shall be fully admissible in any
enforcement proceedings regarding this Agreement.


      [REMAINDER OF PAGE INTENTIONALLY LEFT BLANK; SIGNATURE PAGES FOLLOW]








                                      -5-
<PAGE>   6

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the date first set forth above.

                                      BT COMMERCIAL CORPORATION, in its
                                      individual capacity as a Lender
                                      and in its capacity as Agent

                                      By:    /s/ Frank Fazio
                                             ----------------------------
                                      Name:  Frank Fazio
                                             ----------------------------
                                      Title: Principal
                                             ----------------------------

                                      HELLER FINANCIAL, INC.

                                      By:    /s/ Albert J. Forzano
                                             ----------------------------
                                      Name:  Albert J. Forzano
                                             ----------------------------
                                      Title: Vice President
                                             ----------------------------

                                      SANWA BUSINESS CREDIT CORPORATION

                                      By:
                                             ----------------------------
                                      Name:
                                             ----------------------------
                                      Title:
                                             ----------------------------

                                      FLEET CAPITAL CORPORATION

                                      By:
                                             ----------------------------
                                      Name:
                                             ----------------------------
                                      Title:
                                             ----------------------------

                                      LASALLE NATIONAL BANK

                                      By:    /s/ Karen J. Orlich
                                             ----------------------------
                                      Name:  Karen J. Orlich
                                             ----------------------------
                                      Title: Assistant Vice President
                                             ----------------------------

                                      CONGRESS FINANCIAL CORP. (CENTRAL)

                                      By:    /s/ Brett Mook
                                             ----------------------------
                                      Name:  Brett Mook
                                             ----------------------------
                                      Title: Vice President
                                             ----------------------------

                                      FINOVA CAPITAL CORPORATION

                                      By:    /s/ Brian Rujawitz
                                             ----------------------------
                                      Name:  Brian Rujawitz
                                             ----------------------------
                                      Title: Assistant Vice President
                                             ----------------------------


<PAGE>   7



                            NATIONAL CITY COMMERCIAL FINANCE,
                            INC.

                            By:    /s/ Stanley J. Gregorin, Jr.
                                   ---------------------------------------------
                            Name:  Stanley J. Gregorin, Jr.
                                   ---------------------------------------------
                            Title: Vice President
                                   ---------------------------------------------

                            PNC BUSINESS CREDIT

                            By:
                                   ---------------------------------------------
                            Name:
                                   ---------------------------------------------
                            Title:
                                   ---------------------------------------------

                            IBJ SCHRODER BUSINESS CREDIT
                            CORPORATION

                            By:    /s/ Ning C. Louie
                                   ---------------------------------------------
                            Name:  Ning C. Louie
                                   ---------------------------------------------
                            Title: Vice President
                                   ---------------------------------------------

                            NATIONAL BANK OF CANADA

                            By:    /s/ Jonathan Millard/Leroy A. Irvin
                                   ---------------------------------------------
                            Name:  Jonathan Millard/Leroy A. Irvin
                                   ---------------------------------------------
                            Title: Vice President/Vice President & Manager
                                   ---------------------------------------------

                            BANKBOSTON, N.A.

                            By:    /s/ Marwan Isbaih
                                   ---------------------------------------------
                            Name:  Marwan Isbaih
                                   ---------------------------------------------
                            Title: Vice President
                                   ---------------------------------------------

                            METAL MANAGEMENT, INC., a Delaware
                            corporation, in its individual capacity
                            as a Borrower and in its capacity as
                            Funds Administrator


                            By:    /s/ David A. Carpenter
                                   ---------------------------------------------
                            Name:  David A. Carpenter
                                   ---------------------------------------------
                            Title: Vice President, General Counsel and Secretary
                                   ---------------------------------------------


<PAGE>   8




                                       AEROSPACE METALS, INC.
                                       AMERICAN SCRAP PROCESSING, INC.
                                       C SHREDDING CORP.
                                       CALIFORNIA METALS RECYCLING, INC.
                                       CIM TRUCKING, INC.
                                       COMETCO CORP.
                                       COZZI BUILDING CORPORATION
                                       COZZI IRON & METAL, INC.
                                       EMCO TRADING, INC.
                                       FERREX TRADING CORPORATION
                                       FIRMA, INC.
                                       FIRMA PLASTIC CO., INC.
                                       HOUSTON COMPRESSED STEEL CORP.
                                       HOUTEX METALS COMPANY, INC.
                                       THE ISAAC CORPORATION
                                       P. JOSEPH IRON & METAL, INC.
                                       KANKAKEE SCRAP CORPORATION
                                       MAC LEOD METALS CO.
                                       METAL MANAGEMENT ARIZONA, INC.
                                       METAL MANAGEMENT REALTY, INC.
                                       PROLER SOUTHWEST INC.
                                       PROLER STEELWORKS L.L.C.
                                       SALT RIVER RECYCLING, L.L.C.
                                       SCRAP PROCESSING, INC.
                                       TROJAN TRADING CO.
                                       USA SOUTHWESTERN CARRIER, INC.
                                       138 SCRAP ACQUISITION CORP.
                                       R & P HOLDINGS, INC.
                                       METAL MANAGEMENT GULF COAST, INC.
                                       NEWELL RECYCLING WEST, INC.
                                       NAPORANO IRON & METAL CO.
                                       NIMCO SHREDDING CO.
                                       MICHAEL SCHIAVONE & SONS, INC.
                                       TORRINGTON SCRAP COMPANY
                                       KIMERLING ACQUISITION CORP.
                                       METAL MANAGEMENT PITTSBURGH, INC.
                                       FPX, INC.
                                       PERLCO, L.L.C.


                                       By:    /s/ David A. Carpenter
                                              ------------------------
                                       Name:  David A. Carpenter
                                              ------------------------
                                       Title: Vice President
                                              ------------------------





                                       RESERVE IRON & METAL LIMITED
                                       PARTNERSHIP

                                       By:  P. JOSEPH IRON & METAL, INC.,
                                            its general partner


                                       By:    /s/ David A. Carpenter
                                              ------------------------
                                       Name:  David A. Carpenter
                                              ------------------------
                                       Title: Vice President
                                              ------------------------


<PAGE>   9

                                    ANNEX 1
                                       TO
                                AMENDMENT NO. 5
                           DATED AS OF APRIL 14, 1999

                                OTHER BORROWERS

1.   AEROSPACE METALS, INC.
2.   AMERICAN SCRAP PROCESSING, INC.
3.   C SHREDDING CORP.
4.   CALIFORNIA METALS RECYCLING, INC.
5.   CIM TRUCKING, INC.
6.   COMETCO CORP.
7.   COZZI BUILDING CORPORATION
8.   COZZI IRON & METAL, INC.
9    EMCO TRADING, INC.
10.  FERREX TRADING CORPORATION
11.  FIRMA, INC.
12.  FIRMA PLASTIC CO., INC.
13.  HOUSTON COMPRESSED STEEL CORP.
14.  HOUTEX METALS COMPANY, INC.
15.  THE ISAAC CORPORATION
16.  P. JOSEPH IRON & METAL, INC.
17.  KANKAKEE SCRAP CORPORATION
18.  MAC LEOD METALS CO.
19.  METAL MANAGEMENT ARIZONA, INC.
20.  METAL MANAGEMENT REALTY, INC.
21.  PROLER SOUTHWEST INC.
22.  PROLER STEELWORKS L.L.C.
23.  SALT RIVER RECYCLING, L.L.C.
24.  SCRAP PROCESSING, INC.
25.  TROJAN TRADING CO.
26.  USA SOUTHWESTERN CARRIER, INC.
27.  RESERVE IRON & METAL LIMITED PARTNERSHIP
28.  138 SCRAP ACQUISITION CORP.
29.  R & P HOLDINGS, INC.
30.  METAL MANAGEMENT GULF COAST, INC.
31.  NEWELL RECYCLING WEST, INC.
32.  NAPORANO IRON & METAL CO.
33.  NIMCO SHREDDING CO.
34.  MICHAEL SCHIAVONE & SONS, INC.
35.  TORRINGTON SCRAP COMPANY
36.  KIMERLING ACQUISITION CORP.
37.  METAL MANAGEMENT PITTSBURGH, INC.
38.  FPX, INC.
39.  PERLCO, L.L.C.