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EBITDA MARGIN EXCEEDS 46% in 2Q10, THE HIGHEST LEVEL FOR SEVEN QUARTERS

São Paulo, Brazil, August 10, 2010

Companhia Siderúrgica Nacional (CSN) (BM&FBOVESPA: CSNA3) (NYSE: SID) announces today its results for the second quarter of 2010 (2Q10), in accordance with Brazilian accounting principles, and denominated in Brazilian Reais (R$). All comments presented herein refer to the Company’s consolidated results and comparisons refer to the first quarter of 2010 (1Q10), unless otherwise stated. The Real/US Dollar exchange rate on June 30, 2010 was R$1.8015.

• The 2Q10 EBITDA margin reached 46.4%, 5.4 p.p. up on 1Q10, further underlining the recovery of CSN’s operating margins;

• EBITDA totaled R$1.8 billion in 2Q10, 37.7% more than in the previous quarter, and R$3.1 billion in the first half, a 119.9% improvement over the first six months of 2009;

• Net income stood at R$894 million in the second quarter, 85.6% up on 1Q10, and R$1.4 billion in 1H10, 95.5% higher than the same period last year;

• Gross profit in 2Q10 amounted to R$1.9 billion, growth of 33.9% over the quarter before, and R$3.3 billion in the first half, 113.2% up year-on-year;

• The 2Q10 gross margin stood at 48.3%, 4.4 p.p. more than in 1Q10;

• Net revenue totaled R$3.9 billion in 2Q10, 21.6% higher than the previous three months, chiefly due to the upturn in mining revenue, which jumped by 86.1% in the 1Q10;

• Net revenue from mining was strongly impacted in 2Q10 by higher prices and the 15.9% increase in iron ore exports over the quarter before;

• 2Q10 net revenue from the sale of steel products moved up by 8.1% over 1Q10, fueled by higher prices and the 5.1% upturn in domestic market sales volume;

• Consolidated steel product sales volume on the domestic market, where margins are historically higher, accounted for 88.5% of total sales volume in 2Q10;

• Cement production totaled 377 thousand tonnes in the first six months, accompanied by sales of 373 thousand tonnes and net revenue of R$71.0 million;

• First-half investments came to R$1.5 billion;

• CSN paid R$1.6 billion in dividends and interest on equity to its shareholders in 2Q10;

• The net debt/EBITDA ratio closed the second quarter at 1.56x, based on EBITDA of R$5.3 billion in the last 12 months, remaining stable when compared to the ratio at the end of 1Q10;

• CSN is a highly capitalized company, with a cash position of R$9.7 billion.

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Brazil

Despite the recent slowdown of Brazil’s economy, accompanied by low inflation, some economists believe there will be a recovery in the second half of the year. This growth may impact the performance of various economic segments, mostly the construction and infrastructure industries.

The National Confederation of Industry is predicting an upturn in the pace of public and private investments this year, from the current 18% of GDP to 19.4%, the highest level since the 1970s. According to the institution, this increase will be essential to sustain economic growth and to maintain installed capacity use within appropriate levels.

According to the Central Bank’s Focus bulletin, GDP should move up by 7.2% in 2010. In order to avoid abusive price hikes, the Central Bank has been gradually increasing interest rates in order to control domestic demand. At its last meeting, it raised the Selic base rate by 50bps to 10.75% p.a., the highest level since March 2009.

Expectations regarding jobs and earnings in 2010 should encourage investments, confirming the healthy performance of the economy. Unemployment measured by the IBGE fell by 7% in June and current market conditions point to the continuation of a favorable scenario until the end of the year. The rate is expected to reach 6.6% in 2011. According to MB Associados, the bulk of wages should grow by 6% in 2010.

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The IMF believes per capita GDP will reach US$10,289 in 2010, a figure that could well be revised upwards by year-end.

Macroeconomic Projections

Sectors Steel:

The World Steel Association estimates year-on-year global steel production growth of 27.9% in 1H10, thanks to the recovery of various markets, led by China, which produced 323 million tonnes in the period, 21% more than in 1H09. China’s annual output may exceed 2009 volume, reaching a new record.

Brazil’s steel industry also did exceptionally well in the first six months.

According to the Brazilian Steel Institute (IABr), production through June totaled 16.4 million tonnes of crude steel and 7.9 million tonnes of rolled flat steel, 55% and 72% up, respectively, over the same period in 2009. In 2Q10, crude steel output came to 8.4 million tonnes and rolled flat production stood at 4.1 million tonnes, 6% and 8% more, respectively, than the previous quarter.

The recovery becomes even clearer if we look at apparent consumption, which totaled 13.3 million tonnes in the first half, 60.3% up year-on-year, and 7 million tonnes in the second quarter, an 11% improvement over 1Q10.

Domestic sales recorded equally expressive growth, with rolled flat products climbing 62% year-on-year in the first half to 6.1 million tonnes. Second-quarter sales came to 3.2 million tonnes, 14% more than in 1Q10.

Steel product exports amounted to 4.3 million tonnes in the first half, 25% up on the same period last year, and 2.2 million tonnes in the second quarter, 10% up on 1Q10.

The IABr estimates apparent steel product consumption of 25 million tonnes in 2010, 34% more than in 2009 and a new annual record, reflecting the excellent performance of Brazil’s economy and its impact on demand from the leading steel-intensive industrial segments, led by strong construction growth, continued auto expansion and the healthy performance of the capital goods and home appliance / OEM industries.

The Institute also estimates total production of 33 million tonnes of crude steel and 21 million tonnes of rolled steel in 2010, with exports of 11 million tonnes.

Segments

Automotive: The first half of 2010 was marked by the excellent performance of the auto industry, fueled by domestic demand, in turn chiefly sustained by government tax breaks and the greater availability of credit.

According to ANFAVEA (the vehicle manufacturers’ association), first-half production totaled 1.75 million units, 19% up year-on-year. Growth in 2010 is estimated at 7%, which, if confirmed, will be a new annual record.

A total of 1.6 million units were licensed in the first half, 9% up on the same period in 2009, a new six-month record. Exports totaled 358,000 units in the same period, 78% more than in 1H09, when global sales suffered a sharp downturn.

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ANFAVEA estimates annual output of 3.4 million units, 8% higher than in 2009, yet another record figure.

Construction: The healthy performance of the Brazilian economy has continued to favor the construction industry, which remains heated, chiefly thanks to the expansion of credit, lower unemployment and the increase in the bulk of wages.

According to the Planning Ministry, the funds allocated to the Minha Casa, Minha Vida program and the PAC (Accelerated Growth Program), should increase from R$ 25 billion this year to R$ 44 billion in 2011.

The Caixa Econômica Federal, which finances 80% of the country’s mortgage lending, announced a 95% year-on-year first-half increase in housing loans to R$ 34 billion.

According to recent Labor Ministry figures, the number of sector jobs increased from 79,000 in 1H09 to 230,000 in 1H10.

Also in the first six months, Abramat (the construction material manufacturers’ association) estimated a 19.8% year-on-year upturn in the sale of building materials, higher than the average 2010 forecast of 15%. As a result, the Central Bank pushed up its construction GDP growth forecast for 2010 from 10%, at the end of the first quarter, to 13%.

Distribution: The distribution sector was positively impacted in the first half by the upturn in demand and the recovery of industrial investments.

According to INDA (the steel distributors’ association), flat steel purchases by distributors recorded consistent growth in 2Q10, totaling 1.3 million tonnes, 33% above the previous quarter. This growth was also fueled by higher imports, which moved up by 8% in the same period.

Import growth was in turn pushed by the buoyant domestic market, the stronger Real and still ample supply on the international market. Other contributing factors included state government import incentives and the persistence of production and export subsidies in various markets abroad.

Steel sales totaled 2.0 million tonnes in the first six months, 28% more than the same period last year, and 1 million tonnes in the second quarter, virtually identical to 1Q10.

Inventories were sufficient for 3.6 months (1.1 million tonnes) above the historical average of 2.8 months.

Home Appliances / OEM: Sales moved up by around 7% year-on-year in 1H10. Many consumers brought forward their purchases in order to take advantage of the prevailing tax break. Although the IPI tax cut was removed at the end of January, home appliance prices only began to move up in May when retail inventories existing at the time of the removal ran out. The reduction in the pace of sales was expected, with the sector having to seek out a new balance after the return of IPI to normal levels. Nevertheless, according to Eletros (the appliance manufacturers’ association), annual sector growth is expected to reach 8% in 2010, thanks to healthy credit, extended financing terms, greater job stability and higher consumer earnings.

International

USA: The United States economy is only recovering slowly due to caution on the part of consumers and financial institutions and the IMF is predicting GDP growth of 3.3% in 2010.

According to the U.S. Department of Labor, unemployment closed June 2010 at 9.5%, a relatively high level, equivalent to 14.6 million jobless individuals in absolute terms.

According to World Steel Association, the U.S. produced 21.4 million tonnes in 2Q10, 9% up on the previous quarter, and 41 million tonnes in 1H10, a hefty 69% up on 1H09.

Given the slow, but steady recovery of demand, plants have been able to produce more. According to CRU, the U.S. steel plants were working at 71.2% of installed capacity at the end of the first ten days in July.

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Also according to CRU, first-half steel consumption increased by 72% year-on-year, while consumption in the second quarter moved up by 9.6% over the previous three months.

Although demand and prices should remain under pressure in the short term, seasonal factors and the low level of distributors’ inventories should ensure that sales pick up as of September.

Europe: Following a period of uncertainty, particularly in Greece, Spain, Portugal and Ireland, the European economy is showing signs of stabilizing and various Euro-Zone countries have approved austerity packages designed to reduce the public deficit. Nevertheless, the IMF still estimates GDP growth of 1% in 2010, despite the financial turbulence.

In a recent stress test of the European banking sector, with a particular focus on banks in those countries with the biggest public deficits and which simulated three crisis situations in 2010 and 2011, only seven of the 91 EU banks failed. The figures showed which banks had sufficient capital to absorb the predicted losses and maintain satisfactory liquidity levels. The disclosure of these results, together with greater control over public spending, should reduce Euro-Zone risk perception.

According to recent World Steel Association figures, the Euro Zone produced 90 million tonnes of steel in 1H10, 45% up on the 1H09, and 47.2 million tonnes in the second quarter, 11% more than in 1Q10.

According to CRU, European flat steel consumption in 2Q10 climbed by 16.4% over the first three months, while first-half consumption increased by 60% year-on-year, with sales of 37.8 million tonnes.

Orders for steel products are likely to fall in the short term, pressuring prices, accompanied by an increase in imports and fiercer competition among the EU’s suppliers.

Although demand may be better than expected, many plants have announced production cut-backs in the coming months, which should lead to greater equilibrium between supply and demand.

Asia: The latest Chinese GDP figures confirm expectations that the country’s economy is stabilizing. Second-quarter GDP grew by 10.3%, versus 11.9% in 1Q10. Even though growth is still high, the slower pace of the world’s third largest economy is causing concern throughout the entire global market.

The government has adopted a series of measures to contain a possible credit bubble and increase in property prices and inflation, which is expected to reduce economic growth to more sustainable levels by year-end.

According to the China National Development and Reform Commission, the government will invest US$100 billion in 23 new infrastructure projects in the west of China to promote the region’s development.

According to World Steel Association, China continued to lead the global steel production rankings, with output of 323 million tonnes of crude steel in 1H10, 21% up year-on-year. If this pace is maintained, annual production should reach 600 million tonnes in 2010.

Domestic demand appears to be slowing, which is reflected in industrial output. The PMI index of the CFLP (Chinese Federation of Logistics and Purchasing) fell for the second consecutive month in June 2010, indicating a reduction in industrial activity.

In addition, the elimination of steel product export incentives (VAT exemption) has made overseas shipments exports less competitive, putting even more pressure on the domestic market.

Over-production and already high inventories have been exerting downward pressure on prices. In June, Shanghai distributors were selling hot-rolled for RMB4,170/t, RMB130 down on previous levels.

Given this price pressure, Asian production cuts appear likely, especially in view of the high cost of raw materials, particularly iron ore and coal.

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Iron Ore

The iron ore market in 2009 was marked by strong demand in 2H09, with transoceanic annual trade of 944 million tonnes, according to Macquarie. The 2010 estimates are positive and this volume should be exceeded.

China continued to lead the market, with imports of 628 million tonnes in 2009, according to the Tex report, while CRU believes the country will account for two-thirds of global iron ore demand by 2014. In 2010, China is expected to import 667 million tonnes.

Given dynamic demand in China and the new iron ore price framework, Chinese imports have become more volatile.

Iron ore price in the spot market had been falling, however, in the last two weeks, it started recovering and remains at a level still higher than at the end of the first half of 2009, reaching US$136/t (CIF China) at the close of July, recovering slightly over the last few weeks.

The new contractual prices have reduced the gap between the old benchmark system and the spot market price. This new pricing system should maintain prices closer to market reality.

Given the poor quality of China’s ore, plus its inefficient production costs, imports will almost certainly move up, especially from Brazil and Australia.

Indian production should go to the local steel industry, especially if steel output records an upturn. In addition, the Indian government has introduced a series of measures to rein in iron ore exports.

According to SECEX (the Foreign Trade Secretariat), Brazil exported 141 million tonnes of iron ore in 1H10, 20% up year-on-year and already back to the levels recorded in the pre-crisis period of 2008.

Investments in mining assets are also growing, particularly in Brazil and Australia. According to Dealogic, in 2010 to date China invested US$ 8.3 billion in the acquisition of mining assets abroad, representing 76 new transactions. According to the Heritage Foundation, total investments in mining and metals should reach US$ 100 billion by 2014.

Cement

Driven by the construction sector, demand for cement has been moving up substantially. The disparity between demand and supply in some Brazilian regions at certain times can trigger recourse to imports. Because cement is a perishable product that occupies a lot of storage space, inventory levels should be just enough to cover immediate demand. When demand peaks, therefore, imports are a distinct possibility.

Investments in new plants added 4 million tonnes to the country’s installed capacity, which currently stands at 67 million tonnes p.a., according to SNIC (the cement industry association).

Also according to SNIC, first-half sales totaled 27.6 million tonnes, 15% more than in 1H09, while annual sales are expected to move up by 12.5% to 58 million tonnes.

The Presidente Vargas Steelworks produced 1.20 million tonnes of crude steel in 2Q10, 2% more than the 1.18 million tonnes recorded in 1Q10, while rolled flat steel output increased by 5%, from 1.20 to 1.27 million tonnes in the quarter.

In comparison with 2Q09, however, growth was much more substantial, reaching 38% for crude steel and 31% for rolled steel, as can be seen in the table below.

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CSN’s total steel production costs came to R$1,432 million in 2Q10, a 12% growth or R$154 million, up on the R$1,278 million recorded in the previous quarter, chiefly due to higher raw material costs.

Raw materials: increase of R$112 million, primarily related to the following inputs:

• Coal: increase of R$10 million, basically due to the higher acquisition cost;

• Coke: upturn of R$48 million, due to increased consumption and the higher acquisition cost;

• Pellets: growth of R$29 million, basically due to the higher acquisition cost which was retrospectively applied since January 2010;

• Third-party coils: increase of R$11 million;

• Other raw materials: upturn of R$14 million.

Labor: growth of R$19 million, primarily due to the pay rise following the annual collective bargaining agreement.

General costs: upturn of R$24 million, chiefly due to:

• Energy and fuel: increase of R$10 million, mostly in natural gas;

• Maintenance and supplies: growth of R$14 million, due to periodic maintenance procedures.

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Net revenue per tonne averaged R$ 2,074 in 2Q10, 5.5% up on 1Q10, impacted by the product mix sold in the quarter.

√ PRODUCTION

Own production of finished iron ore products¹ totaled 6.9 million tonnes in 2Q10, 11% up on the previous quarter, 5.6 million of which from Casa de Pedra, and 1.3 million from Namisa.

Namisa’s purchases from third parties amounted to 2.9 million tonnes, 1.5 million of which acquired from CSN.

√ SALES

Total sales of finished iron ore products¹ by CSN and Namisa, excluding own consumption, came to 6.2 million tonnes in 2Q10, 11% more than in 1Q10. Exports totaled 5.9 million tonnes, accounting for 95% of total sales volume and 16% up on the previous three months, while domestic sales stood at 0.3 million tonnes.

Of this total, Namisa sold 4.0 million tonnes, all of which for export.

First-half finished-product ore sales stood at 11.9 million tonnes¹, 20% up year-on-year. Exports came to 11.0 million tonnes, equivalent to 93% of total sales and 15% more than the same period last year, while the domestic market accounted for 0.8 million tonnes.

The Presidente Vargas Mill absorbed 1.7 million tonnes in the second quarter and 3.3 million tonnes year-to-date.

√ INVENTORIES

Finished iron ore product inventories closed 2Q10 at 7.9 million tonnes.

(1) Production, purchases and sales include 100% of the stake in NAMISA.

Cement production totaled 377 thousand tonnes in the first six months, accompanied by sales of 373 thousand tonnes and net revenue of R$71.0 million.

CSN is operating 3 distribution centers in the cities of Rio de Janeiro, in the state of Rio de Janeiro and Mauá and São José dos Campos, in the state of São Paulo. In the coming months, the Company intends to open a new distribution center in the state of Rio de Janeiro. In June, CSN doubled its cement grinding capacity and is currently operating at 200 thousand tonnes/month.

Net revenue totaled R$3.9 billion in 2Q10, 22% up on 1Q10, chiefly due to the 86% upturn in mining revenue, in turn pushed by higher iron ore prices in 2Q10 and increased sales volume. Steel revenue moved up 8% in the same period, also fueled by higher prices and sales volume.

Net Revenue (R$ MM)

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SG&A expenses totaled R$304 million in 2Q10, R$10 million down on 1Q10. Selling expenses fell by R$34 million, reflecting the reversal of provisions for doubtful accounts, while G&A expenses increased by R$22 million, primarily due to the collective bargaining agreement in May and the upturn in expenses with service providers.

In 2Q10, CSN recorded a negative R$80 million in the “Other Revenue and Expenses” line, versus a negative R$96 million in 1Q10. The variation was mainly due to adhesion to the Rio de Janeiro state tax repayment program.

The 2Q10 net financial result was negative by R$421 million, chiefly due to the following factors:

• Interest on loans and financing totaling R$424 million;

• Negative monetary and foreign exchange variations of R$39 million, including the result of derivative operations;

• Other financial expenses of R$18 million.

These negative effects were partially offset by returns on financial investments totaling R$60 million.

On June 30, 2010, the consolidated net debt totaled R$8.3 billion, R$1.7 billion more than the R$6.6 billion recorded on March 31, 2010, essentially due to the following factors:

• EBITDA of R$1.8 billion;

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• Investments of R$1.1 billion;

• Payment of dividends and interest on equity totaling R$1.6 billion;

• R$0.4 billion effect related to the cost of debt booked in the income statement;

• REFIS (tax repayment) installments of R$0.2 billion;

• Working capital effect on cash flow of R$0.2 billion.

The remaining R$389 million went to the parent company, mostly in the following projects:

• Warehousing / Others: R$143 million;

• Maintenance and repairs: R$102 million;

• Expansion of the Casa de Pedra mine: R$61 million;

• Technological improvements R$38 million;

• Expansion of the Port of Itaguaí: R$36 million.

On the NYSE, daily traded volume in CSN’s ADRs averaged US$104 million in 2Q10, 6% less than the previous quarter.

In 1H10, among those shares making up the IBOVESPA, CSN’s were among the ten most traded. The Company’s ADRs were also among the ten most traded Latin American companies on the NYSE.

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Dividend Payments

In 2Q10, CSN paid R$1,570 million to its shareholders related to fiscal year 2009, complementing the R$250 million paid on December 29, 2009, as an advance on interest on equity for that year:

On April 30, 2010, the Company paid R$70 million as interest on equity; On June 25, 2010, the Company paid R$1,500 million as dividends.

On July 15, 2010, through its wholly-owned subsidiary CSN Resources S.A, CSN issued bonds worth US$ 1 billion at 6.5% p.a. maturing in July 2020, pursuant to Rule 144A and Regulation S of the United States Securities Act. The issue price was 99.096% and the bonds were guaranteed by the Company.

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