Due to surging prices of needle coke, a main raw material, as well as higher prices of other raw materials and supplies, Tokai Carbon has resolved to revise its prices for graphite electrodes and commenced negotiations with individual clients. Details are as follows.

Descriptions

1. Details of the price revision (a) Scope: Graphite electrodes of all sizes for the Japanese market (b) Effective date: Starting with deliveries on October 1, 2005 (c) Price increase: 30,000 yen/ton (approximately 9%) 2. Reasons for the price revision (a) Surging prices of needle coke (NC), the main raw material for graphite electrodes, with repeated NC price increases due to higher crude oil prices. (b) Surging prices of other major raw materials and various supplies Higher prices for pitch, another major raw material, due to higher tar prices, as well as higher prices of fuel and other supplies. (c) Tight supply of graphite electrodes worldwide Tight supply is further exacerbated by the discontinuation of production at a major NC plant in the US within this year.

Considering recent market conditions, Tokai Carbon will target prices of at least US$4,000/ton for standard products also in its pricing negotiations for sales outside Japan. Tokai Carbon's foremost rationale behind this price revision is to ensure stable supplies to all clients. Clients can rest assured of Tokai Carbon's full commitment to reducing cost factors within its control; however, substantial cost increases such as those above cannot be fully absorbed through such efforts.