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 institute a further price revision for graphite electrodes and to commence negotiations with 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 in April 2006. (c) Price increase : 35,000 yen/ton. 2. Reasons for the price revision (a) Surging prices of needle coke (NC), the main raw material for graphite electrodes. - Tight raw materials supply worldwide due to discontinuation of NC production at a petroleum refinery in the US. - Additionally, pressure on supply of high-grade NC owing to strong demand for top-quality graphite electrodes. - Cost increases at NC producers due to high crude oil and tar prices. (b) Surging prices for other key materials and supplies. - Price increases for main raw material pitch due to higher valuation for tar, as well as higher fuel prices.

In forthcoming negotiations for sales outside Japan, Tokai Carbon will target prices of at least US$4,000/ton for standard products. Tokai Carbon remains committed to its efforts to lower costs and will persist in intense negotiations to curb price increases for raw materials. Despite all these endeavors, however, in order to maintain steady procurement of raw materials, sound production, and stable supply, a further price revision cannot be avoided.