Despite the positive effects of the government's 
economic stimulus measures, overall domestic 
demand for iron and steel was sluggish and remained 
 at the same level as that of the previous fiscal
 year. The principal factor restraining demand 
for iron and steel was the adverse influence of the 
sharp appreciation of the yen, primarily on 
manufacturing industries, throughout the first half of 
the fiscal year. Total exports of steel fell because of a 
steep decline in exports to China and sluggish 
shipments to the United States due to the decelerating
 U.S. economy. 
  Amid this environment, we strove to restore our 
operations following the Great Hanshin Earthquake, 
increase sales volume, and expand sales of such 
products as galvanized steel sheets and accelerated 
cooling, high-strength steel plates. We also 
endeavored to secure new orders for steel castings 
and forgings as well as titanium products. Thanks to 
these efforts, we achieved growth in domestic sales 
and exports. 
  In welding materials, efforts to increase sales of 
flux-cored wire underpinned an expansion in sales 
volume. 
  Consequently, sales in the Iron and Steel Sector 
rose 4.7%, to ¥499.9 billion, in comparison with the 
previous fiscal year.