912603--11/13/2006--SCHNITZER_STEEL_INDUSTRIES

related topics

{cost, regulation, environmental}

{gas, price, oil}

{customer, product, revenue}

{competitive, industry, competition}

{operation, natural, condition}

{acquisition, growth, future}

{operation, international, foreign}

{cost, operation, labor}

{personnel, key, retain}

{product, liability, claim}

{product, market, service}

{condition, economic, financial}

The Company s businesses are affected by seasonal fluctuations. The principal markets served by the Company are highly competitive. Fluctuations in the value of the U.S. dollar relative to other currencies could adversely affect the Company s ability to price its products competitively. The Company s ability to deliver products to customers and the cost of shipping and handling may be affected by circumstances over which the Company has no control. The Company s businesses depend on adequate supplies of raw materials. Equipment upgrades and equipment failures may lead to production curtailments or shutdowns. The Company may not be able to negotiate future labor contracts on acceptable terms, which could result in strikes or labor actions. Changes in the availability and cost of electricity and natural gas are subject to volatile market conditions. The Company may not be able to complete strategic acquisitions or successfully integrate future acquisitions. If the Company loses its key management personnel, it may not be able to successfully manage its business or achieve its objectives. Some of the Company s operations present significant risk of injury or death. Risks Relating to the Metals Recycling Business A significant increase in the use of recycled metal alternatives by current consumers of recycled metal could reduce demand for the Company s products. Risks Relating to the Auto Parts Business An adverse change in the Company s relationships with auction companies could increase its costs and adversely affect the Company s ability to service its customers. The Company relies on information technology in critical areas of the Auto Parts Business operations, and a disruption relating to such technology could harm the Auto Parts Business. The Company could be subject to product liability claims. A decline in the number of vehicles involved in accidents could have a material adverse effect on the Auto Parts Business. Risks Relating to the Steel Manufacturing Business A sharp reduction in China s pace of economic expansion could reduce demand for recycled metal or, if Chinese steel production substantially exceeds local demand, may result in the export of significant excess quantities of steel products. The Company is subject to environmental regulations and environmental risks which could result in significant environmental compliance costs and environmental liability.

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912603--11/13/2006--SCHNITZER_STEEL_INDUSTRIES_INC