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Kobe Steel sells its North American steel powder business to Höganäs

July 10, 2008

TOKYO, July 10, 2008 - Kobe Steel, Ltd. has reached agreement to sell the business of its U.S.-based subsidiary Kobelco Metal Powder of America, Inc ("KOMPA") to North American Höganäs, Inc., a subsidiary of Sweden's Höganäs AB. The agreement was signed on July 9 in Pennsylvania, USA.

The agreement calls for KOMPA, located in Seymour, Indiana, to shift production and marketing of its steel powder to North American Höganäs over a brief period as customers transition to the material made by the subsidiary of the Swedish group. During this period, KOMPA will produce steel powder products under consignment from North American Höganäs. KOMPA expects to cease powder production in spring 2009 upon completion of transitioning its customers' requirements to North American Höganäs.

To support the smooth transition to North American Höganäs, KOMPA and North American Höganäs will form a new company called KHTech Inc. This joint venture company will provide technical services and sales support primarily to KOMPA's Japanese customers in the United States as well as to its other current U.S. customers. KHTech shall be owned two-thirds by North American Höganäs and one-third by KOMPA.

About Kobe Steel, Ltd.
Kobe Steel, Ltd. is one of Japan's leading steelmakers and producers of aluminum and copper products. Other businesses include welding consumables, industrial machinery, engineering, construction equipment, and electronic materials. More information is available at: www.kobelco.com

About Höganäs AB
Höganäs was founded in 1797 and is today a leader within the iron and metal powder industry. End products are mainly used by the automotive industry and home appliances, lawn and garden and hand-tools. In 2007 the turnover was MSEK 5 838 (5 123) and income before tax MSEK 562 (525). Höganös is listed on the Nordic Stock Exchange's Mid Cap list. For further information please visit website www.hoganas.com