Notes to Non-Consolidated Interim Financial Statements
September 30, 1996 and 1995 (Unaudited)


1. Basis of Presentation of Financial Statements
The accompanying non-consolidated interim financial statements should be 
read in conjunction with the financial statements and related notes included 
in the Annual Report of Kobe Steel, Ltd. (the "Company") to stockholders for 
the year ended March 31, 1996.
 The accompanying interim financial statements have been translated from 
the financial statements which are prepared for Japanese domestic purposes, 
in accordance with interim accounting standards promulgated by the 
Business Accounting Deliberation Council. Certain modifications have been 
made in the accompanying interim financial statements in order to facilitate 
understanding by foreign readers.
 For convenience only, U.S. dollar amounts presented in the accompanying 
interim financial statements have been translated from Japanese yen at the 
rate of ¥111 to US$1, the rate prevailing on September 30, 1996.

2. Marketable Securities and Investments in Securities
Listed equity securities, both in marketable securities and investments in 
securities, are principally stated at the lower of moving average or market 
value. As allowed under interim accounting standards, the Company has not 
written down to market value listed equity securities whose market prices 
are deemed to recover by the end of this fiscal year.
 The book value and market value of such securities at September 30, 1996 
were as follows:
                                                                 Thousands of   
                                                                  U.S.dollars   
                                          Millions of yen          (Note 1)     
--------------------------------------  --------------------    --------------  
  Book value                                 ¥ 206             $ 1,856
  Market value                                 192               1,730


3. Contingent Liabilities
At September 30, 1996, the Company was contingently liable as follows:

                                                                 Thousands of   
                                                                  U.S.dollars   
                                          Millions of yen          (Note 1)     
--------------------------------------  --------------------    -------------- 
  Guarantees of loans                       ¥ 4,420            $ 39,820


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In the opinion of the Company's directors, this report enables investors to 
make an informed assessment of the results and activities of the Group for 
the period.