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GUARANTEE AGREEMENT

This GUARANTEE AGREEMENT (as the same may hereafter be amended, supplemented or otherwise modified, this Guarantee), dated as of September 5, 2006, is by A. M. CASTLE & CO., a Maryland corporation (Guarantor) in favor of Canadian Lenders (as defined in the Credit Agreement referred to below) and BANK OF AMERICA, N.A., CANADA BRANCH, as Canadian Agent for Canadian Lenders (together with its successors and assigns, herein referred to as Canadian Agent).

WHEREAS, A. M. Castle & Co. (Canada), Inc., a corporation organized under the laws of the Province of Ontario, Canada (Canadian Borrower) is a wholly-owned subsidiary of Guarantor;

WHEREAS, Guarantor, Canadian Borrower, the lenders from time to time party thereto, including Canadian Lenders, Canadian Agent and Bank of America, N.A., as U.S. Agent, entered into an Amended and Restated Credit Agreement, dated as of September 5, 2006 (as from time to time modified, amended, restated or supplemented, the Credit Agreement) pursuant to which the lenders party thereto have agreed to extend certain credit facilities to U.S. Borrower and Canadian Borrower;

WHEREAS, Guarantor will receive substantial direct and indirect economic, financial and other benefits as a result of the credit facilities provided to Canadian Borrower pursuant to the Credit Agreement.

NOW THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Guarantor hereby agrees as follows:

All capitalized terms used herein and not defined herein have the respective meanings given them in the Credit Agreement.

2.1. Guarantee of Payment and Performance. Guarantor hereby absolutely, unconditionally and irrevocably guarantees to Canadian Agent and Canadian Lenders:

(a) the full and punctual payment by Canadian Borrower of the Canadian Obligations, at any time payable under the Loan Documents in each case when and as the same shall become due and payable, whether at maturity, pursuant to mandatory or optional prepayment, by acceleration or otherwise, all in accordance with the terms and provisions of this Guarantee, the Credit Agreement and the other Loan Documents, including, without limitation, overdue interest, post-petition interest, indemnification

payments and all of such obligations which would become due but for the operation of the automatic stay pursuant to Section 362(a) of the United States Bankruptcy Code and the operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code; and

(b) the full and punctual performance by Canadian Borrower of all duties, agreements, covenants and obligations of Canadian Borrower contained in the Credit Agreement and the other Loan Documents,

and the full and prompt payment, on demand, of all reasonable costs and expenses incurred by (x) Canadian Agent in connection with the negotiation, preparation, execution and delivery of this Guarantee and (y) Canadian Agent, Canadian Lenders or any trustee or agent acting on behalf of Canadian Agent and/or Canadian Lenders in enforcing any of its rights and remedies under this Guarantee, the Credit Agreement or any of the other Loan Documents, including, but not limited to, all reasonable attorneys fees and expenses (whether or not there is litigation), court costs and all costs in connection with any proceedings under any Debtor Relief Laws (collectively, the Guarantied Obligations), provided that Guarantor shall not be liable for the reasonable fees and expenses of more than one separate firm of attorneys representing Canadian Agent.

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