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                                                                    EXHIBIT 10.3



                                PLEDGE AGREEMENT

         This PLEDGE AGREEMENT (this "Agreement"), dated as of July 22, 1998, is
between T. BENJAMIN JENNINGS (the "Pledgor"), and METAL MANAGEMENT, INC., a
Delaware corporation ("Lender").

                              W I T N E S S E T H:

         WHEREAS, pursuant to a Secured Promissory Note dated as of even date
herewith (as amended, supplemented or otherwise modified from time to time, the
"Note") between the Pledgor and the Lender, the Lender has made a loan to the
Pledgor;

         WHEREAS, the obligations of the Pledgor are to be secured
pursuant to this Agreement;

         WHEREAS, it is a condition precedent to the making of the loan
described above that the Pledgor execute and deliver this Agreement;

         NOW, THEREFORE, for and in consideration of any loan, advance or other
financial accommodation heretofore or hereafter made to the Pledgor under or in
connection with the Note, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

         1. Definitions. When used herein, the following terms have the
following meanings (such meanings to be applicable to both the singular and
plural forms of such terms):

         Collateral - see Section 2.

         Default means the occurrence of any Event of Default.

         Liabilities means all obligations (monetary or otherwise) of the
         Pledgor under the Note.

         Terms used herein and not otherwise defined herein shall have the
         meanings assigned to such terms in the Note.

         2. Pledge. As security for the payment of all Liabilities, the Pledgor
hereby pledges to the Lender and grants to the Lender a continuing security
interest in Pledgor's option to purchase 200,000 shares of common stock of the
Lender at a price of $4.00 per share, represented by Lender's stock option grant
no. 1995-2; all of the shares of common stock of the Lender issuable upon
exercise thereof; all of the certificates and/or instruments representing such
option and shares of stock; and all cash, interest, securities, dividends,
distributions, rights and other property at any time and from time to time
received, receivable or


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otherwise distributed in respect of or in exchange for any or all
of such option and shares.

All of the foregoing are herein collectively called the "Collateral".

         The Pledgor agrees to deliver to the Lender, promptly upon receipt and
in due form for transfer (i.e., duly endorsed in blank or accompanied by stock
powers duly executed in blank), all Collateral which may at any time or from
time to time be in or come into the possession or control of the Pledgor.

         3. Warranties; Further Assurances. The Pledgor warrants to the Lender
that: (a) the Pledgor is (or at the time of any future delivery, pledge,
assignment or transfer thereof will be) the legal, beneficial and equitable
owner of the Collateral free and clear of all Liens of every description
whatsoever other than the security interest created hereunder; (b) the pledge
and delivery of the Collateral pursuant to this Agreement will create a valid,
perfected, first priority security interest in the Collateral in favor of the
Lender, free of any adverse claims; (c) all shares of stock issuable upon
exercise of the option referred to in Section 2 are duly authorized, validly
issued, fully paid and non-assessable; and (d) the proceeds of the loan made by
Lender under the Note will not be used by Pledgor in violation of Regulation U
promulgated by the Federal Reserve Board.

         So long as any of the Liabilities shall be outstanding, the Pledgor:
(i) shall not, without the express prior written consent of the Lender sell,
assign, exchange, pledge or otherwise transfer, encumber, or grant any option,
warrant or other right to purchase, or otherwise diminish or impair any of its
rights in, to or under any of the Collateral; and (ii) shall execute such
Uniform Commercial Code financing statements and other documents (and pay the
costs of filing and recording or re-filing and re-recording the same in all
public offices deemed necessary or appropriate by the Lender) and do such other
acts and things, all as the Lender may from time to time reasonably request, to
establish and maintain a valid, perfected, first priority security interest in
the Collateral (free of all other liens, claims and rights of third parties
whatsoever) to secure the performance and payment of the Liabilities.

         Pledgor additionally represents and warrants to the Lender that this
Agreement constitutes the legal, valid and binding obligation of the Pledgor,
enforceable against the Pledgor in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency, or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability.




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         4. Holding in Name of Lender. The Lender may from time to time after
the occurrence and during the continuance of an Event of Default under the Note
(an "Event of Default"), without notice to the Pledgor, take all or any of the
following actions: (a) transfer all or any part of the Collateral into the name
of the Lender, with or without disclosing that such Collateral is subject to the
lien and security interest hereunder, (b) appoint one or more sub-agents or
nominees for the purpose of retaining physical possession of the Collateral, (c)
notify the parties obligated on any of the Collateral to make payment to the
Lender of any amounts due or to become due thereunder, (d) endorse any checks,
drafts or other writings in the name of the Pledgor to allow collection of the
Collateral, (e) enforce collection of any of the Collateral by suit or
otherwise, and surrender, release or exchange all or any part thereof, or
compromise or renew for any period (whether or not longer than the original
period) any obligations of any nature of any party with respect thereto and (f)
take control of any proceeds of the Collateral.

         5. Voting Rights, Dividends, etc. (a) Notwithstanding certain
provisions of Section 4 hereof, so long as the Lender has not given the notice
referred to in paragraph (b) below:

         A. The Pledgor shall be entitled to exercise any and all voting or
         consensual rights and powers (including exercise rights) and stock
         purchase or subscription rights (but any such exercise by the Pledgor
         of stock purchase or subscription rights may be made only from funds of
         the Pledgor not constituting part of the Collateral) relating or
         pertaining to the Collateral or any part thereof for any purpose;
         provided, however, that the Pledgor agrees that it will not exercise
         any such right or power in any manner which would materially adversely
         impair the value of the Collateral or any part thereof or violate any
         provision of the Note.

         B. The Pledgor shall be entitled to receive and retain any and all
         dividends, interest and other cash payments payable in respect of the
         Collateral which are paid in cash by the Lender, but all dividends and
         distributions in respect of the Collateral or any part thereof made in
         shares of stock or other property or representing any return of
         capital, whether resulting from a subdivision, combination or
         reclassification of Collateral or any part thereof or received in
         exchange for Collateral or any part thereof or as a result of any
         merger, consolidation, acquisition or other exchange of assets to which
         the Lender may be a party or otherwise or as a result of any exercise
         of any stock purchase or subscription right, shall be and become part
         of the Collateral hereunder and, if received by the Pledgor, shall be
         forthwith delivered to the Lender in due form for transfer (i.e.,
         endorsed in blank or


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         accompanied by stock or bond powers executed in blank) to be held for
         the purposes of this Agreement.

         C. The Lender shall execute and deliver, or cause to be executed and
         delivered, to the Pledgor, all such proxies, powers of attorney,
         dividend orders and other instruments as the Pledgor may request for
         the purpose of enabling the Pledgor to exercise the rights and powers
         which it is entitled to exercise pursuant to clause (A) above and to
         receive the dividends, interest and payments which it is authorized to
         retain pursuant to clause (B) above.

         (b) Upon notice from the Lender after the occurrence and during the
continuance of an Event of Default, and so long as the same shall be continuing,
all rights and powers which the Pledgor is entitled to exercise pursuant to
Section 5(a)(A) hereof, and all rights of the Pledgor to receive and retain
dividends, interest and payments pursuant to Section 5(a)(B) hereof, shall
forthwith cease, and all such rights and powers shall thereupon become vested in
the Lender which shall have, during the continuance of such Event of Default,
the sole and exclusive authority to exercise such rights and powers and to
receive such dividends, interest and payments. Any and all money and other
property paid over to or received by the Lender pursuant to this paragraph (b)
shall be retained by the Lender as additional Collateral hereunder and applied
in accordance with the provisions hereof.

         6. Remedies. Whenever an Event of Default shall exist, the Lender may
exercise from time to time any rights and remedies available to it under the
Uniform Commercial Code as in effect in Illinois or otherwise available to it,
as well as any other rights and remedies provided for herein or otherwise
available to it. Without limiting the foregoing, whenever an Event of Default
shall have occurred and be continuing the Lender (a) may, to the fullest extent
permitted by applicable law, without notice, advertisement, hearing or process
of law of any kind, (i) sell any or all of the Collateral, free of all rights
and claims of the Pledgor therein and thereto, at any public or private sale or
brokers' board and (ii) bid for and purchase any or all of the Collateral at any
such public sale and (b) shall have the right, for and in the name, place and
stead of the Pledgor, to execute endorsements, assignments, stock powers and
other instruments of conveyance or transfer with respect to all or any of the
Collateral. The Pledgor hereby expressly waives, to the fullest extent permitted
by applicable law, any and all notices, advertisements, hearings or process of
law in connection with the exercise by the Lender of any of its rights and
remedies during the continuance of an Event of Default. Any notification of
intended disposition of any of the Collateral shall be deemed reasonably and
properly given if given at least ten (10) days before such disposition. Any
proceeds of any of the Collateral may be applied by the Lender to the payment



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of expenses in connection with the Collateral, including, without limitation,
attorney costs, and any balance of such proceeds may be applied by the Lender
toward the payment of such of the Liabilities, and in such order of application,
as the Lender may from time to time elect (and, after payment in full of all
Liabilities, any surplus shall be delivered to the Pledgor or as a court of
competent jurisdiction shall direct).

         7. General. No delay on the part of the Lender in exercising any right,
power or remedy shall operate as a waiver thereof, and no single or partial
exercise of any such right, power or remedy shall preclude any other or further
exercise thereof, or the exercise of any other right, power or remedy. No
amendment, modification or waiver of, or consent with respect to, any provision
of this Agreement shall be effective unless the same shall be in writing and
signed and delivered by the Lender and then such amendment, modification, waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.

         This Agreement shall be construed in accordance with and governed by
the internal laws of the State of Illinois, except to the extent that the
validity or perfection of the security interest hereunder, or any remedy
hereunder, in respect of any particular Collateral is governed by the laws of a
jurisdiction other than the State of Illinois.

         This Agreement shall be binding upon the Pledgor and the Lender and
their respective successors and assigns, and shall inure to the benefit of the
Pledgor, the Lender and each of their successors and assigns of the
Administrative Agent.

         This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed an original but all such counterparts shall together constitute
but one and the same Agreement.




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         IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
as of the day and year first written above.



                                    /s/ T. Benjamin Jennings                 
                                    -----------------------------------       
                                    T. BENJAMIN JENNINGS


                                   METAL MANAGEMENT, INC.


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




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