Establishment of Baosteel-NSC/Arcelor Steel Sheets Co.， Ltd.

Nippon Steel Corporation (President: Akio Mimura)， Baoshan Iron & Steel Co.， Ltd. (”Baosteel”， President: Ai Baojun) and Arcelor (CEO: Guy Dolle) established Baosteel-NSC/Arcelor Automotive Steel Sheets Co.， Ltd.， effective as of July 30， 2004.

Baosteel-NSC/Arcelor Steel Sheets Co.， Ltd. was formed pursuant to a joint venture agreement entered into by the three companies dated December 23， 2003， to meet the demand for high-grade automotive steel sheets in China， for which medium- and long-term growth is expected. Since the execution of the agreement， various procedural requirements have been processed， and now， following the official approval by the Chinese government authorities， the joint venture has duly received a permission to operate the business.

With this joint venture， Nippon Steel has established a global supply network of high-quality steel sheets for automobiles in major markets， including the rapidly growing Chinese market. Nippon Steel is convinced that this will enhance services to the carmakers who are expanding their businesses globally and will also greatly contribute to the development of the steel and automobile industries of China.

Construction of the joint venture facilities has been progressing smoothly， and work is being pushed forward to start commercial operations on schedule in May 2005.

(Outline of the joint venture)
● Name of the joint venture:
Chinese name: 宝鋼新日鐵汽車板有限公司
Japanese name: 宝鋼新日鐵自動車鋼板有限公司
English name: Baosteel-NSC/Arcelor Aumototive Steel Sheets Co.， Ltd.
● Business:
Manufacture and sale of automotive steel sheets (cold-rolled sheets and hot-dip galvanized sheets).
● Total investment: 6，500 million Chinese RMB (yuan)
● Registered capital: 3，000 million Chinese RMB (yuan)
● Equity-holding:
(Chinese party) Baoshan Iron & Steel Co.， Ltd.: 50%
(foreign parties) Nippon Steel Corporation: 38%， Arcelor: 12%
● Location: On the premises of Baosteel (Baoshan District， Shanghai)
● Schedule: Production scheduled to start in May 2005.