METAL MANAGEMENT, INC.

COMPENSATION COMMITTEE CHARTER

June 28, 2005

The Board of Directors (the “Board”) of Metal Management, Inc. (the “Company”) has heretofore constituted and established a Compensation Committee (the “Committee”) with authority, responsibility and specific duties as described in this Charter.

Purpose

The purpose of the Compensation Committee is to aid the Board in discharging its responsibilities relating to compensation of the Company’s executives. The Committee shall have overall responsibility for (i) reviewing and determining the compensation levels and establish criteria for bonuses of, and to establish the general compensation policies for, executive officers of the Company; (ii) recommending general compensation practices to be applied to other employees of the Company; and (iii) making discretionary option, stock and stock appreciation right awards to executive officers under the Company’s stock option plans.

Committee Membership; Meetings

The Committee shall be comprised of no fewer than two members, all of whom satisfy the definition of “independent” under the listing standards of The Nasdaq Stock Market. All Committee members shall also be “non-employee directors” as defined by Rule 16b-3 of the Securities Exchange Act of 1934, as amended, and “outside directors” as defined by Section 162(m) of the Internal Revenue Code.

The members of the Committee shall be appointed by the Board pursuant to the nominations process adopted by the Board and removed by the Board in its discretion. The Committee shall elect one of its members to act as chairman. If the chairman is not present, the members may designate an acting chairman by majority vote of the members present. A majority of the members shall constitute a quorum.

All meetings of the Committee will be held pursuant to the Bylaws of the Company with regard to notice and waiver thereof, and written minutes of each meeting will be duly filed in the Company records. The Committee shall have the authority to delegate any of its responsibilities to subcommittees as the Committee may deem appropriate in its sole discretion, provided the subcommittees are composed entirely of independent directors.

Committee Authority and Responsibilities

In furtherance of the Committee’s purpose, the Committee shall have the following authority and responsibilities:

Resources and Authority of the Committee

The Committee shall have the resources and authority appropriate to discharge its duties and responsibilities, including the authority to select, retain, terminate, and approve the fees and other retention terms of special counsel or other experts or consultants, as it deems appropriate, without seeking approval of the Board or management, provided however that the Committee shall coordinate any engagement of such experts and consultants with management to assure an appropriate payment mechanism. The Company will provide for appropriate funding, as determined by the Committee, for payment of compensation to any counsel, consultants or other advisors employed by the Committee.