METAL MANAGEMENT, INC.

AUDIT COMMITTEE CHARTER

The Board of Directors (the “Board”) of Metal Management, Inc. (the “Company”) has heretofore constituted and established an Audit Committee (the “Audit Committee”) with authority, responsibility and specific duties as described in the Audit Committee Charter (the “Charter”). This document replaces and supersedes in its entirety the previous Charter of the Audit Committee adopted by the Board. This Charter is intended to be flexible so that the Audit Committee is able to meet changing conditions. The Audit Committee is authorized to take such further actions as are consistent with the following described responsibilities and to perform such other actions as applicable law, the Company’s constituent documents and the Board may require.

The Audit Committee, including the Chairman of the Audit Committee, shall be elected by the Board and shall be comprised of not less than three directors, each of whom is independent as defined by Section 10A(m)(3) of the Securities Exchange Act of 1934 and the regulations thereunder and by the NASDAQ National Market System (the “NASDAQ”). The Audit Committee, including the composition of its membership, shall at all times be in compliance with the rules and regulations issued from time to time by any authorities having jurisdiction over its affairs, including the United States Securities and Exchange Commission (the “SEC”), the National Association of Securities Dealers, Inc. and the NASDAQ.

The Audit Committee is appointed by the Board for the purpose of overseeing the accounting and financial reporting processes of the Company, press releases relating to financial reporting of the Company and the audits of the financial statements of the Company. The Audit Committee is also appointed to assist the Board in fulfilling its responsibilities in matters relating to accounting and financial reporting practices of the Company and the adequacy of the Company’s internal controls.

The Audit Committee shall have the authority (but shall not be required) to retain special legal, accounting or other consultants to advise the Audit Committee. The Audit Committee may request any officer or employee of the Company or the Company’s outside counsel or independent auditor to attend a meeting of the Committee or to meet with any members of, or consultants to, the Committee. The Audit Committee may also meet with the Company’s bankers, investment bankers or any financial analysts who follow the Company. The Company will provide for appropriate funding, as determined by the Audit Committee, for payment of compensation to any counsel, consultants or other advisors employed by the Audit Committee.

The Audit Committee shall make periodic reports to the Board. With regard to its responsibilities, the Audit Committee shall:

1.       Review and reassess the adequacy of this Charter annually and recommend any proposed changes to the Board for approval.

2.       Review the annual audited financial statements (with management and separately with the independent auditor out of the presence of management), including major issues regarding accounting and auditing principles and practices that could significantly affect the Company’s financial statements; and review an analysis prepared by management and the independent auditor of significant financial reporting issues and judgments made in connection with the preparation of the Company’s financial statements.

3.       Review and discuss with management, internal audit and the independent auditor the Company’s annual assessment of internal control over financial reporting, the independent auditor’s conclusions with respect to the audits of management’s assessment and the design and operating effectiveness of internal control over financial reporting including significant deficiencies or material weaknesses in internal controls that could significantly affect the Company’s financial statements.

4.       Review with management and the independent auditor the Company’s quarterly financial statements, including the results of the independent auditor’s reviews of the quarterly financial statements, prior to the public release of financial information.

5.       Review with management and the independent auditor the effect of regulatory and accounting initiatives as well as any material off-balance sheet structures on the Company’s financial statements.

6.       Review major changes to the Company’s auditing and accounting principles and practices as suggested by the independent auditor, internal auditors or management.

7.       Establish procedures for the evaluation of the Company’s major financial risk exposures and meet periodically with management to review the Company’s major financial risk exposures and the steps management has taken to monitor and control such exposures.

8.       Ensure receipt from the outside, independent auditors of a formal written statement delineating all relationships between the auditor and the Company, consistent with Independence Standards Board Standard 1, and actively engage in a dialogue with the auditor with respect to any disclosed relationships or services that may impact the objectivity and independence of the auditor.

9.       Take, or recommend that the full board take, appropriate action to oversee the independence of the outside auditor.

10.    Obtain and review a report from the independent auditor at least annually regarding (a) the independent auditor’s internal quality-control procedures, (b) any material issues raised by the most recent internal quality-control review, or peer review, of the firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm, (c) any steps taken to deal with any such issues, and (d) all relationships between the independent auditor and the Company. Evaluate the qualifications and performance of the independent auditor.

11.    Appoint the independent auditor, which firm shall report directly to the Audit Committee and is ultimately accountable to the Audit Committee and the Board.

12.    Review any appointments and replacements of the Vice President of Internal Audit.

13.    Approve the proposed scope of the independent auditor’s annual audit plan and fees for such services, including the procedures to be followed, as well as the program for coordination of the independent and internal audit efforts.

14.    Approve any engagement of the independent auditor to provide non-audit services and the fees for such services.

15.    Discuss with the independent auditor material issues on which the national office of the independent auditor was consulted by the Company’s audit team.

16.    Review and discuss with management and the independent auditor any proposal for hiring any key employee of the independent auditor who was engaged on the Company’s account.

17.    Review the significant reports to management prepared by the internal auditing department and management’s responses.

18.    Discuss with the independent auditor the matters required to be discussed by the Statements on Auditing Standards No. 61, 89 and 90 relating to the conduct of the audit.

19.    Review with the independent auditor any problems or difficulties the auditor may have encountered and any management letter provided by the auditor and the Company’s response to that letter, including any difficulties encountered in the course of the audit work, including any restrictions on the scope of activities or access to required information, and any disagreements with management.

20.    Review with the independent auditor and management any changes required in the scope of internal audit department’s activities, and the internal audit department responsibilities, budget and staffing.

21.    Prepare the report required by the rules of the SEC to be included in the Company’s annual proxy statement.

22.    Establish procedures for (i) the receipt, retention, and treatment of complaints received by the Company regarding accounting, internal accounting controls, or auditing matters, and (ii) the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

23.    Review with management any matters that may have a material impact on the financial statements, including the Company’s compliance policies, any material reports or inquiries received from regulators or governmental agencies and any employee complaints or published reports.

24.    Approve the expenses and fees paid to any legal, accounting or other advisers retained by the Audit Committee.

25.    Review, approve and monitor the Company’s Business Ethics Policy and Code of Conduct and the Code of Ethics for Senior Executives and Financial Officers.

26.    Review and approve any related-party transactions between the Company and any of its subsidiaries and an officer or director of the Company.

27.    Review actual and potential conflicts of interest of Board members and corporate officers, and clear any involvement of such persons in matters that may involve a conflict of interest or corporate opportunity.

While the Audit Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Audit Committee to plan or conduct audits or to determine that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles, nor is it the duty of the Audit Committee to assure compliance with laws and regulations. Management is responsible for determining that the Company’s financial statements are complete and accurate and are in accordance with generally accepted accounting principles. The independent auditor is responsible for conducting an audit of the Company’s financial statements in accordance with standards of the Public Company Accounting Oversight Board (United States).