Tokyo, 7 January - In response to the rapidly increasing prices of needle coke and other raw materials, Tokai Carbon announces a new pricing for graphite electrodes in the Japanese market as below.

1.	New Price Structure in Japan A price increase of ¥45,000 per metric ton applies for all new businesses in the domestic Japanese market delivered on and after 1 April 2005. For Super-Sized Graphite Electrodes as diameter over 26 inches, further increase of ¥10,000/ton is added to the above range.
2.	Background The main reason for the price increase is due to the rapid price increase of needle coke (NC), which is the major raw material for Graphite Electrode. This price increase is based on below factors: 1) A worldwide supply shortage caused by production stoppage at Unocal's US plant which is the major supplier of NC. 2) An unusual supply shortage caused by continuing brisk demand for premium quality NC that is indispensable for high quality electrodes. 3) Higher prices of crude oil and coal tar respectively reflect to the cost of Petroleum-based NC and Pitch-based NC. The prices of raw materials other than the NC such as pitch and breeze are also rapidly increasing due to the price hike of coal tar.
3.	An extra-price for Super-Sized Electrode High cost premium NC is indispensable for Super-Sized electrodes larger than 26 inch in diameter, however, currently there is little premium cost charge for these larger sizes in Japan. To address this problem, we will establish a new price structure for Super-Sized electrodes in an effort to secure the stable supply of electrodes for our customers. Considering the current high cost of raw materials, an appropriate price increase for the Super-Sized electrode is over ¥20,000/ton. In order to prevent sudden change, however, we propose an increase of ¥10,000/ton this time.
4.	Pricing in the International Market The bankruptcies of two main European and US producers in November 2002 and the brisk steel production are causing greater demand and the resultant supply shortage of Graphite Electrodes. Prices in the international market are recently approx. $3250 for standard size and approx. $3500 for Super-Sized electrodes in Europe and North America, which are increasing further. In all new price negotiations for the international market, we will target at $3500 and above for the standard sizes. The same level of price hikes will take effect in Asia as well, starting with all new price negotiations. We will continue to make an all-out effort to minimize any increase in raw materials costs. However, due to the need to procure raw materials and ensure sound production and stable supply, it has become necessary to ask our customers to cooperate in the above scheduled price increases.