Hitachi Metals and Baosteel to Establish Joint Venture for China Roll Business.

Tokyo, Japan, Apr 17, 2006 - (JCN Newswire) - Hitachi Metals, Ltd. (TSE: 5486) announced today that it has reached an agreement with Shanghai Baosteel Group of China to establish the joint venture company "Bao Steel Hitachi Rolls (Nantong) Ltd." for the manufacture and sale of cast rolls for hot strip mills. The companies will thereby meet growing demand for high-quality, high-performance rolls in the Asian market, led by the rapidly growing Chinese market.

Crude steel production continues to grow sharply in China, reaching 350 million tons in 2005. Meanwhile, the steel industry is gradually shifting from a focus on increased production volume to the manufacture of high-grade products, such as hot rolled steel sheets or strips for use in automobile panels or electric appliance field, as well as energy-saving and efficient rolling operations. For these reasons, demand for high-quality, high-performance cast rolls, which are indispensable to the rolling of high-grade steel sheets or strips, is expected to undergo significant growth.

Hitachi Metals holds Japan's top share in the market for cast rolls, and is the industry's leading corporate group in technological development capabilities. This is reflected, for example, in its position as a world pioneer in the development of high-speed compound rolls* and other roll technologies. With the state-of-the-art steel production facilities of Baoshan Iron and Steel Co., Ltd. and other group companies under its umbrella, Baosteel boasts China's largest steel production capacity, and is China's preeminent corporate group in the manufacture of high-grade sheet steel and other superior products.

In order to meet the expected significant growth in demand for high-quality, high-performance rolls, Hitachi Metals and Baosteel have reached an agreement to establish the joint venture company "Bao Steel Hitachi Rolls (Nantong) Ltd." for the manufacture and sale of cast rolls in China.

Establishing the joint venture company will make it possible to expand production volume and shorten delivery times, thereby enabling companies to achieve greater stability in the supply of high-quality, high-performance cast rolls, even amid booming demand, to the Chinese market and other regions of Asia.

Overview of New Company (Planned)

Company Name:         Bao Steel Hitachi Rolls (Nantong) Ltd.
Business activities:  Manufacture and sale of cast rolls for hot strip mills
Location:             Nantong Economic-Technological Development Area,
                      Nantong City, Jiangsu Province, China
                      (Approximately 100km upstream from Shanghai on the
                      Yangtze River)
Representative:       Chairman Hirokazu Tanaka
                      President Kiyoshi Nishigaki
Establishment:        First half of fiscal 2006
                      (Commence Shipment First half of fiscal 2008)
Capital:              RMB 520million (Approximately 7.5 billion yen)
                      Hitachi Metals Group70%, Baosteel Group30%
Area:                 Land area 130 thousand square meters
                      Building area 40 thousand square meters
Employees:            Approximately 300 (fiscal 2010)
Sales Plan:           Fiscal 2010: 6 billion yen / year

About Hitachi Metals, Ltd.

Hitachi Metals, Ltd. was established in 1956 and is engaged in the manufacture of diverse products including special steels, electronics-related products and piping equipment. The Company's principal activity is the manufacture of high-grade metal products and materials.

Source: Hitachi Metals, Ltd.

Contact:

Customer Inquiries:
Mikio Sakiyama
Roll Company,
Hitachi Metals, Ltd.
Telephone: [phone]
Facsimile : [phone]

Press Inquiries:
Akio Minami
Corporate Communications Div.,
Hitachi Metals, Ltd.
Telephone: [phone]
Facsimile : [phone]

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