Mark Widmar - Chief Financial Officer Kelly Powell - Manager of Investor Relations Craig Shular - Chief Executive Officer

Ian Zaffino - Oppenheimer & Co. Brett Levy - Jefferies Michael Gambardella - J.

P. Morgan Securities, Inc.

Chuck Murphy - Sidoti and Co. Wayne Cooperman - Cobalt Capital Mark Parr - Keybanc Capital Market Bob Richard - Longbow Research Asad Abedi - Merrill Lynch Lavon Von Redden - Hockey Capital Paresh Jain - Religare Securities Mike Christodolou - Inwood Capital [Frank Bis] - Pilot [Greg Finney] - Smith Barney Brad Langston - SAMLYN Capital Charles Bradford - Bradford Research Yvonne Verano – Jeffries and Company Shaun Nicholson – Kennedy Capital

Thank you, Dianna. Good morning and welcome to GrafTech International’s third quarter conference call.

On the call today is GrafTech Chief Executive Office, Craig Shular and our Chief Financial Officer, Mark Widmar. We issued our third quarter earning’s release this morning.

If you did not receive a copy, please contact [Jen Radikey] at 216-676-2281 and she will be happy to fax or email a copy to you. As a reminder, some of the matters discussed during this call may include forward looking statements as defined in the private securities litigation reformat of 1995.

Please note the cautionary language about our forward looking statements contained in our press release. That same language applies to this call.

Also to the extent that we discuss any non-GAAP financial measures, you will find reconciliations in our press release, which is posted on our website at www.graftech.com in the investor relation section. At this time, I would like to turn the call over to Craig.

Thank you, Kelly. Good morning everyone and thank you for joining GrafTech’s conference call.

Today we’ll take you through our third quarter highlights and then open it up for questions. In the Q3 we recorded sales of 316 million, an increase of 26% and gross profit of 114 million, representing a 45% improvement versus Q3 ’07.

Operating income increased 57% to 87 million. Income from continuing operations before specials improved 90% to $66 million resulting in 55 times BPS.

Operating cash-flow was $69 million more than tripling year-over-year. We completed the quarter with a company record low net debt of $331 million, a reduction 32 million over the second quarter of ‘08 and an improvement of $285 million year-over-year.

Turning to our industrial material segment, net sales increased 24% to $266 million. Operating income for this segment was 74 million, a 43% increase over the prior year.

Our industrial material segment benefited from higher graph electrode selling prices and favorable currency exchange rate fluctuations partially off-set by the anticipated impact of rising raw material costs. The engineered solutions EBIT continued to gain traction as third quarter sales were 50 million, a 39% increase over the same period in the prior year.

Operating income for the second nearly quadrupled to 13 million as compared to 3 million in the Q3 07 quarter. Strong sales and increased demand in solar and electronic thermal management products are reflected in this segment’s improving operating income margin, which is 25.2% year-to-date, an expansion of more than 16 percentage points over the prior year.

Recapping our first nine months ‘08 performance, we’ve continued to leverage our top growth sales at the sales line into solid operating results as a result of our nine months ‘08 results are reflected as follows. Sales are up 26%; operating income increased 52%; income from continuing operations before specials improved more than 80% to $188 million.

Operating cash-flow more than doubled to 171 million. Return on sales for the nine months ‘08 expanded over six full percentage points to 20%.

Lastly, on our first nine months performance, in Q3 we acquired an 18.9% stake in Seadrift Coke, the world's second largest petroleum based needle coke producer. Petroleum needle coke, of course, is our key raw material.

We are in the final stages of completing the purchase price accounting and we will include Seadrift results in our year-end earnings. Turning to outlook.

As a result of the current economic environment, exacerbated by the global financial crisis, we expect the fourth quarter and 2009 to be a very challenging environment for both of our segments. Based on current IMF projections, the growth in the fourth quarter will decline globally, particularly in industrialized nations, where growth rates are expected to be negative.

Consequently, a number of steel producers have announced reductions in operating rates. Based on the above, we expect reduced electric arch steel production in the fourth quarter.

Given current global economic conditions, which have been and may continue to be extremely volatile, we are revising our ‘08 annual guidance for revenue and operating income to reflect market uncertainty and volatility in currency movement. We expect total company ‘08 sales to increase 18 to 20% and we target operating income of $315 million to 4330 million.

Despite the difficult economic environment, ‘08 will be a record year for GrafTech. Looking ahead into 2009, it is very difficult to provide much commentary at this time, given the current volatile and uncertain markets.

Finally, I would like to comment on the turnaround this company has achieved over the past few years. Our team has successfully de-levered the balance sheet, reducing net debt from a peak over 700 million to an anticipated net-debt position of approximately 100 million as we exit this year.

We have repositioned our global production platform. We now have much larger production facilities, at that fewer which are more efficient and located close to our customers.

Over the past few years, we have developed a number of new products and tailored solutions for our customers. As a result, our engineered solution business has gained significant traction and is beginning to contribute in a meaningful way.

Our headcount has been significantly reduced and our productivity has gone up. These improvements, amongst others position us well for the uncertainty that lies ahead.

With that, let’s open it up for question, Dianna.

Hey Greg, how are you?

Morning Brett, how are you today?

Not bad, not bad. You guys have sort got an internal estimate as to how much mini mill capacity is going to come off.

I mean are you saying 5%, 10%? You know, as you guys kind of look forward, you are in an unique position globally to have a sense as to sort of how much capacity is likely to be rationalized at least temporarily.

Any sense as to sort of where that would be?

Yes, Brett very hard to ID it specifically to the electric arc furnace segment. So let’s speak about total steel and just looking around at the customer announcements, they’ve kind of varied from 5 to 10% on the low-end of the reduction too is high as 30%.

So there has been a lot of variation depending on the customer. There has been a lot of variation depending on the marketplace where they operate.

But I would say total steel looks like it’s probably a good 15%, probably plus in announced reductions, globally.

And it does look value is a little skewed towards the integrated. Is that a fair statement?

Yes, no I think that’s very fair that it’s probably skewed towards BOF and will probably continue to be skewed that way. Obviously, EAF for steel production enjoys a number of advantages, better cost structure, I think a much smaller carbon footprint and obviously there are a lot variable BOF furnaces around the world, especially in China.

And I think China in particular saw a good advantage of shuttering some of those during the Olympics, when they really tried to address some of the air quality. And so, time will tell but I think one might imagine a scenario where a lot of those old, small BOF furnaces in China just never come back.

So, Brett I think it’s going to be skewed towards BOF; EAF just got the cost advantage. And as I look at the EAF cost advantage and what some of the analysts are saying that advantage may be widening to-date versus BOF.

Oh yes, no scrap is at $146, I mean that has got to be a huge advantage for a mini mill player. I know that sort of when the music is stopped here, it looked everyone now is refusing deliveries of scrap and sending it back to the producers.

How much on the graphite electrode side, how much was in the pipeline? Are you getting any customer commentary saying, you know what?

We might not be running in December or you know, we want a discount or we are refusing delivery, anything along that line?

We’ve had some customers that have expressed an interest to try and move their order. However in our case Graphite Electrode prices in ‘09, because of raw material increases are going to be higher than ‘08.

And so, if a customer moves an order, they lose that price in ‘09. So I don’t think we’re going to see a material amount of that, obviously we are going to see some of that but I think it’s going to be somewhat muted because prices are going up in ‘09 driven by higher needle coke cost.

And that was the last question. On the needle coke side, I mean my sense is that some of the inputs there might be going down in cost.

Is there any prospects for needle coke cost relief as you look at this situation going into ‘09?

From what we see today, we do not see a scenario where needle coke prices don’t go up double digit in ‘09 versus ‘08.

So the current economic scenario has no effect on needle coke at this point?

Well, you remember ‘09 costs for needle coke, I think for most buyers is in process and been delayed because of the obvious economic situation we have. But I would say tight supply demand in needle coke, even with the slow-down and when I look at year-over-year cost, some of their cost drivers, I would absolutely expect needle coke costs are going to be double-digit percentage increases in ‘09 versus ‘08.

I don’t see anything that’s going to lead us not to that conclusion.

Alright, thanks very much, Craig. I’ll get back in the queue.

Thanks, Brett have a good day.

Good morning guys.

Good morning, Chuck how are you today?

Doing okay, just kind of following up on the pricing question. I mean how far along on you guys in locking in kind of the contracts for ’09 and how are things turning out so far relative to your original expectations?

Well, Chuck it was so early in the game when the economic and financial crisis took hold that really there’s not much I can say at all about ‘09 graphite electrode prices. I can give you kind of the current status, there’s very little booking going on right now by steel customers.

And I don’t think it’s just in the steel industry, I think virtually every industry, there’s very little booking going on for ‘09. So there’s limited activity, I think most of the steel industry, like I think so many industries are de-stocking, so that destocking is underway.

And I would expect that de-stocking to carry through Q4 and probably deep into Q1 as they reduce inventories of steel and also of graphite electrodes. So I look for a softer Q4 and that most likely is going to carry right into Q1 as they have low operating rates and continue their de-stocking.

Okay. And, any sense on what the contribution from Seadrift might be next year?

We’ll include that in our year-end results and we’ll report that in February. And then we’ll have that fully in our numbers and we’ll have a good dialogue around that.

Again, we are very pleased with that acquisition, it’s strategic and as you know, Chuck a key raw material for our company. So we’ve been please with the acquisition and that’ll be in the Q4 numbers.

Okay, great thank you.

Thanks, Chuck have a good day.

Hey guys. And so you looked for pricing up next year, clearly the mini mills are far more competitive to the blast furnaces.

Why do you think you’re seeing a such a slow-down in volume on the mini mill side, is it just complete nobody knows what’s going on and everybody’s cutting back?

Wayne, I think that’s absolutely it. It’s so much uncertainty in the marketplace and our customer’s order book, I think you’ve seen many of them even not give guidance for Q4, which I think is the prudent thing for them to do.

It’s that uncertain. And so I think after a de-stocking period, the steel industry will come back to the market, their book will start to get stabilized and then they’ll start looking for their ‘09 requirements of graphite electrodes and other raw materials.

I don’t think the steel customers are ordering anything, literally for ‘09.

What do you guys see what your competitor’s doing anything interesting?

I think in the case of the global graphite electrode industry, everyone’s in kind of the same boat. The steel industry is de-stocking, there’s virtually no order activity and it’s really probably going to take most of Q4 and deep into Q1.

So I don’t see any difference across the industry.

Right. I mean your stock’s gone absolutely destroyed from where it was and obviously things aren’t quite as good as they were a few months ago.

On the other hand, you had a great quarter, you’re going to be profitable next quarter, you know ‘09 priced things up. It seems like even in a pretty dire scenario, your multiple is somewhat awfully low off of a low number.

What do you guys think about buying back more stock? Or are you just so—in the same canvas as steel guys and nobody wants to commit to do anything at this point?

Well Wayne, time will tell. Obviously, we have bought some stock back in the past and so it’s something we will always evaluate.

But to your point, yes there is so much uncertainty out in the marketplace that I think you’ll see a lot of companies go very slow over the next three/four months until the economic picture becomes clear.

Okay, thanks.

Thanks, Wayne have a good day.

Great, thank you very much.

Morning, Ian how are you today?

Good, good, good. Good quarter, just wanted to focus a little bit on the difference between—or I guess on your electrode contracts, they are not take-or-pay.

Do you have similar dynamics on your needle coke contracts?

You’re correct on graphite electrode prices; they are not take-or-pay. On our raw materials, we usually have somewhat of a band, where there is some flexibility, so in our experience and in our planning; we don’t build a book of raw materials that would put us in a position to be receiving more raw materials than we need.

So we will align demand and raw materials up, so that we don’t get into a position where we get buried with raw materials. That’s not been our past history and that’s not the way we plan our business.

Right, but can you get price relief on the needle coke side after Jan. 1?

Historically, that’s never taken place.

But do you have contracts that permit that?

The contracts do not. The contracts historically are all fixed-price contracts and then there’s a lie in target with some flexibility around that volume.

Okay. And how do you think about pricing versus volumes for your business?

Well, for us obviously in our production facilities, we were throttling back production. We like to align that with customer demand.

And so we have been slowing down our facilities, we’re much more focused on the margin and the profitability, rather than going ahead and running our plants beyond what our customers need and filling up inventory. So, we are slowing down our plants to align in with customer demand.

And I think be better positioned as we go into ‘09 in that way.

Okay, thank you very much.

Thanks, Ian.

Hey, good morning Craig.

Morning, Mike how are you today?

Good, good, good. Congratulations.

A couple of questions, can you give us an idea of what percentage of your ‘09 graphite electrode business has been contracted in terms of the price?

Mike, on that the book building literally just began when the economic financial crisis really started gaining traction. So, obviously there’s a bit in the book, we’re not going to comment on it on this stage, we’d rather go ahead and get through some of the de-stocking period, get back onto building a book for ‘09 and then give guidance, which I think will be much more meaningful after we have a book built.

And our goal and target would be to do that at the February release period.

Because, I mean my understanding was that new quarter, which usually starts this season, you know booked back in June. And then everyone else kind of started after that, is that the case?

I won’t comment on a specific customer, but yes, there are some customers that came out in kind of June, July and that’s their typical buying pattern; that’s their strategy and nothing unusual, they’re usually the ones that come early. So there is some of that activity that took place and then of course the financial crisis overran everything in the orders just—you know everyone pulled out of the market.

I mean are you less than 25% booked for ‘09?

Well as I said, it’s not a guidance we’re going to give at this time. I think whatever we say, really is not that meaningful and really what we’d like to do is go ahead and get the de-stocking behind us as all industries, including the steel industry have underway.

Build a book and then bring that guidance to the market.

Okay. And then on the needle coke, I think I misunderstood your comments earlier on one of the other questions.

First I thought you said that your needle coke prices would be double in ‘09 versus ‘08 and then I heard you say double digits?

Yep, double-digit. They will be up double-digit percent ‘09 versus ‘08.

So I wouldn’t say—I didn’t say double; double-digit percentage.

Okay, because we were hearing that they were up 80 to 100%, is that just way off or?

Yes, I think those are the kinds of numbers. It’s very high double-digits.

Okay. And then how much have you slowed down your graphite electrode production to match the market?

Right now, you know it takes a little time but we’ve obviously have a lot of experience in this area and move very quickly on it. So we’re on a path here in Q4 to be running about 12 to 15% lower operate than what we did in Q3.

And again, all we’re doing is aligning up our production facilities with our customer’s orders.

And just refresh my memory on needle coke as a percent of the total costs of production for graphite electrodes?

Yes, it’s been going up and if you went back a few years because the price was much lower, it was 30, 35%. Now, it’s 40% plus because it’s gone up so much over the last three, four years in cost.

So even if it’s up say 80 to 100% or high double digits and it’s 40% of your cost, it indicates you’re going to get a pretty significant price increase. I know that was on the books anticipated earlier, but how likely is that now?

Well, I think you’re math is probably directionally all correct and logical. And again, I think it’s just too early really to comment on ’09.

And you just have to give us time to put a book together and come back in that February time period would be the goal.

But when we look at needle coke, you’re position probably would be considered advantageous compared to other graphite electrode producers in the world and there’s no substitute for graphite electrodes in a furnace. So presumably at the end of the day, unless some of your competitors just go crazy in terms of discounting regardless of what their needle coke costs are, you would think you’d have to get a fairly sizeable price jammed through.

Yes, looking at the cost structure and how much it’s going up, we agree. Graphite electrode prices are going to have to go up to accommodate and absorb the large cost increases.

And we’ll just have to let things unfold and time will tell. We’ve got a lot of work to do between now and then.

It may not be, like we said, until February when we really have line of sight to an ’09 book. Right now it’s premature.

Okay, thanks Craig.

Thanks Mike. Have a good day.

You too.

Hi, good morning.

Morning Mark, how are you today?

I’m doing alright. Your stock’s doing okay, nice quarter.

Thank you, sir.

I realize that the situation that we’re in on the order book, so I won’t ask you how much of your order book is done and I won’t ask you what your average price up-side is. So I promise not to do that.

But one thing I would like you to try to comment on, Craig, if you could is the pipeline. I’ve seen some customers be willing to stock pile electrodes.

Other customers keep a very short fuse on any sort of consumable supplies. How do you see the pipeline?

Let’s say the steel industry decided it wanted to really de-stock its electrode position that’s on the ground at the mill. How much incremental downside could that create to your volume in ’09?

In regards to the graphite electrode inventories that we see around the world, you’re absolutely right. There are some customers that literally have a couple week’s inventory and then there are some other customers that have a different strategy and they’ll have a number of month’s inventory.

And in some cases it can even vary between a customer’s plants where a customer may have 30, 40 production facilities and the different managers of those will have a different strategy. So you’re absolutely right, it’s all over the board.

If we look at it in totality and without trying to give a number in those global market, what we would see is we should expect the global de-stocking of electrodes to run throughout Q4 and I think deep into Q1. And probably sometime in Q1, it could be the end of Q1, we’ll be back, I think globally, in most of the accounts where they absolutely got to have electrodes.

So I think we should plan on Q4 impact from de-stocking and Q1, and probably deep into Q1, impact of de-stocking from global steel customers.

Okay, and then along those lines, looking at your ’09 production schedules, in prior years, this would include ’08, you’ve had ability to run lower cost needle coke well into the following year. Can you see your existing, your ’08 needle coke supply carrying you through the first half of ’09 or maybe even beyond that at this point?

I think the pattern that you’ve seen over the past will probably continue that in Q1, we’ll have some carryover of that low-cost coke and it’ll probably go into Q2 like we’ve seen in the past. So I think you’ll see, Mark, a similar phenomenon in ’09.

Okay, in terms of guidance, could you give in your updated guidance for ’08 for EBIT and for revenues the magnitude of the currency benefits in both of those numbers?

Absolutely, let me toss that over to Mark.

Hi Mark.

Hi Mark. So in terms of the outlook, is that what your question relates to Mark?

I’m just looking at your ’08 outlook. What’s the totality of the currency benefits in both sales and EBIT?

Yes, so when you look at the outlook for the year, year-to-date, we’re around 5% on currency benefit and when you look at it for the full year, it’s going to be right around 3%.

And that’s on the revenue side?

That’s on the revenue. When you then flow that through to the bottom line, we’ll have about a 10 million EBIT impact year-on-year of currency.

Okay, terrific, alright, thanks very much. I’ll get back in queue.

Mark, have a good day.

Thanks.

Good morning and thanks for taking our call.

Morning, Bob, how are you today?

Good, I appreciate all the color. Production cutbacks to maintain pricing is pretty refreshing.

Would you expect that rational behavior from some of the marginal guys like China? Could you maybe comment on that?

It’s really hard to say what other people are going to do. From our vantage point, it’s just the prudent thing to do aligned with customer demand, shrink working capital, get the cash in the door, allow for some more de leveraging.

So as I said, we’re well under way in slowing down our facilities and aligning them with customer demand. What the others are doing, I have no idea.

Okay, that’s fair. And the lack of clarity in the industrial metals I certainly appreciate.

How about engineered solutions maybe for next year, is there a little more clarity there or is it as unknown as the industrial metals?

Bob, I’d say it’s just as unknown. We don’t have long-term contracts there, and given the global economies and the volatility, I think we should expect, in both of our businesses, impact of this global slowdown.

Okay, thanks very much and great quarter.

Thanks Bob, appreciate it. Have a good day.

Good morning guys.

Good morning Asad, how are you?

Very well, yourself?

Excellent, thank you.

A couple of questions for you. In terms of the customers who are closing their blast productions in Q4.

We’ve talked before about the cost advantages that these guys have relative to the blast furnace producers. So could you run me through why they’re closing these plants down?

Shouldn’t they be closing their blast production structures first?

Asad, each customer obviously has a different portfolio of equipment and so it’s almost case by case. We have some customers that all they have are electric arc furnaces.

They are 100% EAF. And so obviously for them, if they want to slow down, that’s their choice.

And then we’ve got other customers that have a portfolio of blast furnaces, some large, some small, some less productive. And obviously those customers are hitting those small, old BOFs.

And then we’ve got other customers that have all of the above but if they want to slow down just a small increment, well they go to the EAF because they can close one or two million tons. If they want to do more, they’ll go to the big BOF and obviously hit three, four million, five million tons depending on the size of the BOF complex.

So Asad, it varies customer-by-customer. But when you step back and look in general, I’d say in cost to our customer portfolio, EAF is the lower cost way to make steel, more efficient, smaller carbon footprint.

And usually at the end of that whole story, if you’re going to cut back, what we see when we look back on customers, they’ve shuttered more BOF than they have EAFs because of the cost advantage.

I presume if they want to hold back production, I know besides make cuts permanent rather than temporary, they would be switching EAF back on and turning BOF off.

Wait a minute.

Yes?

That’s absolutely right. And what we see many times is if they want to take something out permanently, they look at the old, smaller, highest cost BOFs they have in their portfolio around the world and they’ll take those out.

And in downturns, generally what happens, they never come back. They take those out and then when the market settles and it starts to come back and the upswing comes, the money that they have, they invest in the larger, more efficient furnaces.

So what we tend to see in downturns is a lot of the high-cost facilities to go out of the market, many of them for good. And as I said earlier at the outset, I think in China, we’ll see a lot of this because I think China got a good experience with the Olympics when it shuttered so much steel to try and clean up air quality and they saw obviously a tremendous impact.

They Olympics was absolutely stellar. The air quality was good.

And I think as we sit today, a lot of those old, small BOFs in China, they’re high-cost and the footprint they have on the carbon side is tremendous. I don’t think those are going to come back, and I think that’s probably good news.

And you’ll see more EAF. There’s more scrap coming up in China.

And net net EAF will be the low-cost producer and probably at the end of this cycle will be the one that comes out with a nice growth rate.

And I mean, do you sell to any, I don’t know if they exist, old EAF plants that are inefficient that are relatively high-cost? Is that much in your portfolio?

We have some in our portfolio, I think, like all of the GE producers do. There’s absolutely some of those.

Some of those are in China and some of those may go away in this process also. But in general, EAF’s got $100 plus plus advantage in cost structure over BOF.

And if you look back the last 40 years, almost every year, it’s gained share. And so these troughs, these slow-downs are usually periods where those small, high-cost BOFs really get evaluated.

And a lot of them don’t get turned back on when this is over.

Okay, and then coming back to needle coke pricing, have you actually settled your contract share for 2009? And there is any chance that in given the fact that the world’s situation has changed quite a lot and given that the needle coke producers and good costs have come down considerably and given that fact that you’re a big customers, any chance you can go back and renegotiate pricings in ’09?

Well, ’09 is not fixed yet. ’09 negotiations are still in process.

Obviously they’ve been slowed because of the last two months of economic and financial crisis. So that work is still in process.

But as I said earlier, we expect needle coke prices in ’09 to be up significantly, a high double-digit percentage increase.

Great, and my last question is actually more forward looking for once. It’s on engineered solutions.

I just want to understand how you got to your margins this quarter.

Well, EF has continued to enjoy a number of applications in solar and electronic thermal management customers that have done very well. So we’re well positioned, a number of new products there, some products that we’ve gotten the industry awards for.

And so those tailored solutions are products obviously that command good prices, good margins. They’re unique solutions in some cases.

And that’s allowed EF to drive some of the margin expansion. And then lastly, EF like our IM business, continued to drive lean and productivity improvements.

And so that also is part of that expansion in margin.

That’s good. Thanks for your help.

Thanks Asad. Have a good day.

Good morning, Craig, everybody.

Good morning Lavon. How are you today, sir?

Not too bad. It’s been a while.

I want to come back to the needle coke issue. I guess I’m a little confused in terms of your expectation for that amount of a price increase on the needle coke side given you’re kind of saying that over the next roughly, I guess, six months if I include this quarter, we’re going to have a lot of de-stocking from folks like yourself not ordering needle coke, one would think that supply and demand would kind of shift in your favor and that they wouldn’t be able to get that kind of pricing.

Maybe you can kind of help me understand why that you think you’ll still think you’ll get that high double-digit price increase.

Well, there’s only a handful of producers we’re on. And supply demand has been tight.

And it’s not the only product the refinery can make. And so they can switch to other products.

So I think you add all those up and we see a double-digit increase year-over-year on price. The refinery has other alternatives, other products he can make.

And so this needle coke has been tight for a number of years and there’s only a handful of producers.

Okay, and the other thing I was going to ask is related to just thinking about the de-stocking that’s actually taking place, one would think that given your comments with needle coke, obviously I think yourselves and some of your competitors want to keep margin. The actual price for the graphite electrode, then, as we look into ’09 is going to be substantially higher than where it would be today.

Why would a customer de-stock as opposed to, if anything, I’d be pre-buying to avoid that additional cost on the ground by electrode.

Well, Lemont, I don’t think it’s particular just to the steel industry. I see customers in virtually every industry right now de-stocking and pulling money out of working capital.

Remember the credit markets are virtually completely frozen and so I think there’s a tremendous drive in the steel industry and all industries to go ahead, de-stock, reduce working capital, increase and accelerate cash flow, and de-lever.

Okay.

And so I don’t see it particular just to our steel customers. I see it in every industry right now, de-stocking underway.

And my final question is I think historically we’ve kind of talked about the price of the graphite electrode only being I think a couple percent of the cost of making steel.

That’s right.

Scrap prices have come down substantially. And if you keep margin and your needle coke costs go up as you anticipate, what are the kind of percentage of the cost to make steel move to for the graphite electrode?

Well, under various assumptions, let’s say this year cost of graphite electrode’s been about 2% of cost of a ton of steel, so very, very small number. And what does it grow to, maybe 3%?

So it’s still a very small percentage of the total cost to generate a ton of steel.

Okay, excellent, thanks.

Thanks Lavon. Have a good day.

Alright you too.

Morning. Thanks for taking my question.

Just wanted to confirm that what was said earlier is that we are anticipating an increase in price in the graphite electrode of CY ’09, but probably volumes might fall down. Is that so?

Paresh, that’s correct. We would anticipate ’09 prices to be up driven by higher input costs especially in the case of needle coke.

There are some other costs that are going up also. Some of that metallurgical coke is very tight.

And that’s a very large increase. I would expect that’s going to have a significant price increase still in ’09.

That’s in short supply. We get that from the steel industry and I think they’re still looking, time will tell, for double-digit year-over-year price increase for ’09.

Okay, (inaudible) from around $720 to $550.

Right.

So are we still anticipating that those prices will continue to remain high in ’09?

Petroleum needle coke prices?

Metallurgical coke.

Yes, I still see pressure on the price in metallurgical coke, yes sir.

Okay.

I would expect ’09 prices will be above ’08 for metallurgical coke. That’s what we see right now.

Now obviously the markets are in a great state of change, but that’s the recent data points.

Okay, and is it true that (inaudible) then we contract the graphite electrode prices?

Yes, that’s always been our approach and strategy to go ahead and secure the key raw material needle coke and then go ahead and build the book. And obviously the last couple of months all of that has been delayed with the financial crisis in the world.

Right, so in that case, sense we haven’t contracted the needle coke prices, for the contracts that we have already built in for ’09. I do not think how much contract is built in.

The model, for example, needle coke prices are way above our expectations or way below our expectations. Then, do our customers renegotiate because of high electrode prices?

Well, Paresh we have very little in the electrode book for ’09, so it’s not material. I think the way you should look at ’09, our company has to build the raw material portfolio.

That’s been delayed for all the reasons discussed. And then we have to build and ’09 electrode book that’s been delayed because of all the reasons we talked.

So really for ’09 we’ve got to get into next year to really take a look at it.

(Inaudible) do we or the customers have the flexibility of going back to each other and going back to each other and renegotiating the prices depending upon where the needle coke prices finally settle down.

Well time will tell, but you know

—have the flexibility of going back to each other and renegotiating the prices if for any reason needle coke prices finally settle down?

Well, time will tell, but as I said in the ’09 book, I wouldn’t look at it really as a material amount in the book. The season for building the book just got underway and then the globe went into a financial crisis.

So it’s not a material amount.

Okay. And my final question, at the beginning of the call you said that probably around 15% production cutback has been announced.

So can you give us that divided, the amount that in the steel (inaudible) How much percent of (inaudible) last 15 of the cost of? Last 15 quartile of the cost of?

I don’t know that I fully understand your question. Can you just rephrase it?

I am (inaudible) around hundred million tons of steel globally just for example, and we’re saying that 15% might be shutdown because of the slowdown. So I’m just wondering at this time that in the cost of, how much percentage of EF would be there, as part of the (inaudible) cost of.

Oh. That’s a very hard one to tell.

So it looks like 15% or so of steel has slowed down, on the operating level, how much of that is exactly EF around the world? Very hard to tell or predict.

I think we have to let that play out. But as I said earlier, I think EAF remains advantaged on the cost side versus BOF steel.

And I think that advantage has been growing. And historically that advantage has grown and is looked more attractive to steel producers when we’ve had slowdowns.

Okay. Okay, thanks.

Thanks for taking my questions.

Thanks, Paresh, our pleasure. Have a good day.

Yes.

Hi, Craig.

Good morning Mike, how are you today?

I’m well, thank you. A couple of sets of questions.

I guess we’ve all beaten this needles coke issue pretty well, but just to understand again: you’ve got a supply agreement, right, with Conoco pursuant to a long term supply agreement, so you’re pretty much committed on supply. But historically, right, you’ve built the electrode book in the fall; say now, October, to say January.

And then you’ve got some supply locked in but then you had committed to price in the spring? Do I understand that historical timeline correctly?

Historically it’s worked this way: we have a long term supply agreement with Conoco, that’s for the tonnage. And prices get renegotiated every year, to the market.

And so it’s given us some sense of confidence and assurance over the volume that we’ll have. And so historically what’s happened is before the Graf Electrode book building process began, we negotiated and secured the pricing and finalized the actual volume for the upcoming year.

And then we went on and built the book. And that book-building process, you’re right—usually we would really gain steam during the end of Q3-Q4 and then finish up in February, and obviously none of that’s taking place now because of the financial crisis.

But you’d gone ahead and locked in the price a little early, and now you know what you’re dealing with.

That’s what we’ve done historically. As we sit today, given the global crisis, all of our raw material negotiations are in process and the ’09 book is in process.

Normally, raw materials, we would have a significant portion of our raw material already locked up. And we’d be well into the book-building process.

As we sit here today, there’s virtually none of the raw material locked up, and the book building process is really yet to begin in a meaningful way.

Could you envision that your supplier Conoco would let you go further than say, the spring in terms of committing on pricing? Or again, I know that you’re saying that tight needle coke supply tends to trump the fact that crude prices have been cut in half.

How long out could you or would you want to play that?

Yes, I would expect that needle coke would get fixed this year, and then the book-building process will really get underway in Q1.

And then to triangulate, you used the phrase “a double-digit increase,” and then you said a high double digit increase, and just to triangulate then to pricing, and I know it’s a hypothetical, Craig, and so I’ll note that publicly, but you made the comment that Graphite Electrode as a percentage of steel cost could go from 2 % to 3%. So again, you were speaking broadly and hypothetically, but that’s about a 50 % price increase in theory.

And I would note anecdotally that that supports what one public EAF company said last week, they’ve got a lot of facilities here in the southwest and also in eastern Europe , and they say they’ve locked in at process up 40 to 50 %. Is there anything in the public domain that you could cite anecdotally to triangulate on those types of numbers?

Yes. Let me just say this.

I think you’re reading a little bit more than you should into 2% to 3 % in electrode costs as a percentage of making a ton of steel. The point to the caller that asked that question was, hey, whether it’s two or three percent, it’s a very small percentage of the total cost of steel.

That’s really the point we were trying to make, rather than the 3% itself. So I think you’re reading more into it than what you should, and that really we need to build ’09 raw material portfolio and then we need to build the ’09 graphite electro book before we can really say too much at all or infer too much at all on ’09.

It’s that uncertain out there. And I don’t just think it’s the steel industry.

I think its virtually any industry you go across here globally, because of the financial crisis.

Last question just on competitive behavior. One of your other public competitors did say on their call last week that they’re focusing on margins, but I’m curious if you’ve heard anything out of the high cost small capacity low quality producers in India and China in terms of graphite electrodes.

Any sense of their propensity to want to slog on here in a market where their customers are cutting back?

I have no idea.

Okay. Thank you.

Thank you and have a good day.

Hi, Good morning.

Frank. How are you today?

Good, how are you?

Excellent, thanks. Just to clarify: on the needle coke—sorry to beat a dead horse—have you—you have not fixed a price on that yet?

Or you have?

No, as I said we are still working through our raw material books. So we have not fixed needle coke and other key raw materials, which normally would be fixed by this time of year.

And it’s directly as a result of the financial crisis. So we don’t have our raw material portfolio fixed yet, and we don’t have the ’09 book.

Okay. And I guess obviously you’re talking about huge increases.

My question is, if less steel is going to be produced, there’ll be less graphite electrodes produced. Wouldn’t then there be less needle coke needed and therefore maybe process wouldn’t be up as much?

Or is that not happening?

Well I expect them to be up double digit, high double digit as we said. Now, what everyone has to remember is, remember we booked the needle coke prices that we’re enjoying in ’08 way back in ’07.

And I think you’ve got to look at oil way back then. And so we booked, as we’ve all been talking, we booked that way back before the actual year got underway, so that’s back in a Q3 timeframe.

And then oil continued to go up after that. And we’ve all followed that curve.

So here we sit with oil at $60. But I think if you compare the $60 back to when the ’08 coke was actually booked, you’ll see that the gap is not as large as you’re inferring.

You’re expecting gee, this should come way down. But I think your reference point is gee, oil was $140 now it’s 60-62, it should come way down.

But you have to go back we booked this needle coke way back in ’07 for ’08. And so I don’t expect needle coke to come down.

There’s a handful of producers, the ’08 cost, if you look at the average cost of oil has a lot of room to go up, I think. A handful of producers, it’s tight supply-demand, and don’t know what our book is going to look like.

All I can say is I believe it’s going to be up high double digit costs, there.

Okay.

Metallurgical coke, Frank, also. I think is going to be up double digit.

Because it comes from the steel industry, it’s been very, very tight in the last couple years. And then as you throttle back some blast furnaces, they’re the generator of some of this metallurgical coke.

So I think we’re going to have a number of raw materials that could be up significantly. That maybe is a little counter to the logic, but when you think through it, like when we book needle coke for ‘08 way back in ’07.

Metallurgical coke could be up. There’s some tars that could be in shorter supply.

They could all be double digits that we require.

Okay. Thank you for the clarification.

Thanks, Frank. Our pleasure.

And we’ll move on to [Greg Finney] with Smith Barney.

Morning, Craig.

Morning Greg; how are you?

Fine, thank you. And again, this needle coke issue.

Three or four years ago there was a problem with the pricing of needle coke versus—you fix that price and your electrode price is not—it’s fixed, but the supply’s not fixed. If we have a global slowdown and it continues, could you end up being long needle coke, but not have—people have committed to a certain volume.

Or they haven’t committed to a certain volume. So you’re long needle coke and you don’t have a customer for your electrodes.

They’re not taking the supply.

Well, Greg that’s, I think, in any business that’s always a risk. But it’s a risk that we’ve managed pretty well here the last few years, and obviously it’s a reason why our raw material book is open right now, and our customer book is open.

And we’ll try very hard to align those. And—

Is there any way of—we had talked about this before, several years ago, about not—essentially having more, that you’ll supply the graphite electrode but the pricing will be determined more on a monthly basis, where—and that if you could do the same thing with your needle coke, where you’re not caught in between the needle coke pricing and the graphite electrodes.

Well, Greg, generally what happens is raw material book gets put together such that you understand your cost structure. Then you build your graphite electrode sales book.

So you can understand pretty good what your cost is—to your point—and then I think as to biggest risk, I think you’ve highlighted is, gee, what if things really drop down even worse than what everyone expects. Could you be long raw materials?

Yes, that’s a risk. But it’s a risk I think that we’ve become accustomed to managing through.

Okay. Thank you.

Thanks, Greg. Have a good day.

Welcome Brad, how are you.

Doing well, thanks. Just a couple questions for you guys.

Looking at your 2008 guidance and then if we make some conservative assumptions for next year, you guys should continue pretty significant amounts of cask flow. And I was curious, primarily: what’s your priority for the use of that cash?

And what’s your targeted leverage for the company?

Well, you know, as I’ve said many times, it’s pretty hard to make too many comments about ’09. But let’s talk about our priority for cash.

We’d like to continue to de-lever. We would expect to be entering ’09 with net debt of approximately $100 million.

We just closed, as you know, 131 million all time record low debt in our company’s history. So we’d like to go into this very uncertain period with a very solid balance sheet and very low debt.

So we’ll continue to de-lever. Obviously we’ll watch the marketplace for opportunities, and in any significant trough there sometimes are some opportunities for consolidation in the industry, acquisitions.

So we’ll hopefully be well-positioned for that. If you’re in good shape, strong, solid balance sheet, cash flow, you can seize some of those opportunities.

And that’s the position we’d like to have our company in. You can also continue to grow new products for solar, nuclear, many of the other industries that we’re serving.

And that’s the position we’d like to be in. So going forward Brad I think you’re going to see us continue to de-lever.

If we see a smart, prudent acquisition, we may look at that very hard. We’ll continue to grow our new product portfolio and attack some of these new and emerging markets, alternative energy, nuclear, etcetera.

I guess a second question on that. When you look at the trade-off between buying back stock and further de-levering, how do you make those decisions internally?

Well, obviously like all companies go through consideration of buying back stock. And like I said, we’ve bought some back here in the recent past.

So it’s obviously something we’re very attuned to. It’s something we view very positively.

We have a share buy-back program we’ve actually executed on a portion of that. So it’s obviously something we look at very hard and very favorably.

So we’ll weigh the level of debt, we’ll weigh the credit markets. Are the credit markets opened back up?

is there fluidity out there? Are they getting stable?

We’ll look at the global economies. What do they look like?

What’s our order book look like? And then between that we’ll weigh deleveraging, stock buy-back, acquisitions, a host of alternatives.

New product development, etcetera, that we have to utilize our cash.

Okay, great. And I know you’ve already mentioned this, but I wondered if you could elaborate a little bit more on the depth of the production cuts that you guys are planning to make in ’09, and secondly in the past your gross margins have been 25% plus even back in the worst troughs back in 2002 in the steel cycles.

How drastic were the production cuts then that you had to maintain your process and margin, and what do you foresee the production cuts to get through next year?

Well, as I said earlier on the call, Brad, we’ve throttled back production to align with our customers’ orders, and that’s a 12, 15% cutback. Time will tell where that goes or how long we keep that in place.

I don’t think anyone has a good line on the real demand, because there’s this restocking talking place. So I think real demand will become more evident sometime in Q1 probably.

And then we’ll be in a better position to determine where do we run the plants. It could be a higher level than that; it could be a lower level.

Time really has to tell. Last time last trough you’re right, we did throttle back some.

And as I recall back then we throttled back about 15 to 20 % in production levels.

Okay, great. And do you think if you just had to sort of venture a guess, a 15 to 20% cutback—would that be sufficient to maintain pricing?

I know the model is much more geared toward price than volume, so would that be sufficient to be able to maintain, take enough supply off the market to maintain pricing?

Brad, it’s really too early to tell. There’s so many variables, I think there’s sop much uncertainty in the marketplace that that’s one that really time has to tell.

Fair enough. And I guess a last question on engineering solutions.

Are your current operating margins in the mid 20 % level sustainable on a go-forward basis?

Well, you know, again I apologize for taking this approach on ’09. it’s that uncertain I think in all industries, not just steel and electrodes.

But time’s going to have to tell on that. I can tell what we have done and you’ve seen it in the numbers.

We’ve had some very nice margin expansion and we’ve achieved that by offering some very unique, tailored solutions to the marketplace. Some of our products have received national and international award.

A number of them are going into some emerging industries like nuclear, electronic thermal management, solar, etcetera. And so to the extent those industries still grow, I think we’ll probably still command some very good margins, there.

What we don’t know, obviously, is what the volume look like what’s the volume of the activity of our customers in ’09 and in those industries? And Brad I don’t think anyone really knows that at this stage.

That’s fair. Last question.

Are you guys spec’ed into the solar applications that you service? In that division?

And as a result should that division grow similarly to the expected solar (inaudible) industry of the solar industry?

Well, directionally yes. You’re correct.

We’re in a number of customers’—won’t mention their names. Our customers have different technologies.

Some have very unique proprietary technology where we sign secrecy agreements so we can develop a tailored solution. But to the extent solar continues to grow, I would expect EF will do favorably, very favorably on that.

What we just don’t know is the level of volume. What’s the activity?

Lliterally in across the globe activity has slowed down in every industry. And time is going to have to tell where that really comes out in ’09.

Thanks guys.

Thank you. Have a good day.

Hi, Chuck. How are you today?

Some questions about some of your competitors, whom obviously aren’t as cost-competitive as you are yet they’ve got prices 15% below yours and they’ve got to be getting into difficult straits, and one in particular is private equity owned. What’s the opportunity to take someone, some of the weaker players out?

Well Charlie I really can’t speak for our competitors, and you know obviously we would view and review all opportunities to grow our global platform, and if there was the right opportunity in the marketplace we would look very hard at it. Obviously our balance sheet has strengthened nicely over the last few years.

But Chuck again, this is just one we just have to wait and see where this market goes. I can’t speak for the competitors.

Is there a deal out there? Who knows?

Time will tell.

When you bought the 19% piece of Seadrift, the other portion I believe is private equity owned. Do you have rights of first refusal by any chance?

Chuck, you’re right. The other portion is private equity owned.

We have some very significant minority shareholder rights but we do not have the right of first refusal.

Okay. Thank you.

Thank you, Chuck. Have a good day.

Hey, thanks.

Hey, Mark, how’s it going?

I just had some follow-up. Mark I was wondering if you could talk a little bit about the tax rate, the numbers have been coming up over the last couple of years.

Just to refresh our memories about why your tax rate seems to be increasing on a go forward basis.

Actually, Mark, I’m not sure what numbers you’re looking at, specifically, but our tax rate has been coming down.

Coming down. I’m sorry, I apologize.

Yes, okay, good. I wanted to make sure we were going in the right direction.

But largely I think what you said before, Mark it’s the largely attributed to jurisdictional mix of income that we’re generating. A large portion of our income’s generated outside the U.S.

which has a favorable tax structure associated with it. So as the profitability has been increasing and that profit has been generated in low tax rate jurisdictions we see a favorable impact on our tax rate.

Given some of your production changes that you’re going to be doing here in the fourth quarter and the first quarter, could we see some more positive surprise on the tax rate? Over the next few quarters?

We updated our guidance—at this point in time mark it’s really too early to say much about the rate on ’09. But we have updated our guidance to 25% for the year, which takes into consideration where we are year to date plus what our expectations would be Q4.

For what you’d have to look at for next year I would assume a higher rate at this point in time and then as we learn more about ’09 we could give you better guidance for ‘089 as related to the tax rate.

Okay. I’m just trying—and then just lastly could you talk a little bit about some of the puts and takes for SG&A for ’09?

Again, without I know you can’t quantify it at this point, but what are the things that we really ought to be thinking about at the margin that could have an impact?

Yes. I think if you look at our SG&A year to date, we’re basically flat which is consistent with reductions that we’ve made over the last couple years and we’ve been trying to stay very focused and managing our overhead cost structure.

For ’09 at this point in time we will continue to evaluate and look for leverage where we can and minimize discretionary spending to align that cost structure as best we can to meet our customer demand in volumes that we see. So there will be some discretionary spending whether it relates to T&E, whether it relates to variable compensation that maybe associated with commissions that we may have to pay.

There will be other third party consultants that will scrutinize and evaluate value add and determine whether it’s the right investment that we need to make from that perspective. So we’ll continue to evaluate every line item of our cost structure and we’ll align that to the demand that we see for next year.

Okay. Terrific.

I appreciate the additional color. Thanks.

Hi, just have a follow up regarding Seadrift. Craig, I know you said you’d give details on what it would contribute for ’09 on the fourth quarter conference call, but could you just speak on a qualitative basis how much of a hedge that might provide as compared to rising needle coke prices?

Well, roughly as our ownership, our roughly 19 % ownership and Seadrift does capacity somewhere between 150 or so, 150,000 metric tons. So you could take that percentage of the 150 and you could infer that that gives us somewhat of a hedge.

Yes. Okay.

So it should be a pretty solid hedge, not just a little bit.

Yes. As I said at the outset, we’re pleased with that acquisition.

And I think we’re married up with a very good team; I’ve been impressed with the Seadrift team. They’ve got a fine, highly professional, very committed team, there.

Okay. Great, thank you.

Thank you.

Thanks. I was just wondering if you could talk about whether or not an increase in volume had any impact on the revenue line.

I know you mentioned pricing and currency. Should we assume volumes are flat in 3Q?

The volumes were essentially flat year on year in Q3.

Okay. And then you talked about locking in your needle coke last year way back in ’07.

Do you know what the price of oil was at that time that you locked those contracts in?

Yvonne, it would have been in that Q3 time frame. We don’t give a specific date, but we were Q2 negotiating and probably the actual finalization was in Q3.

So go back to the price of Q2 Q3 of ’07. It would have been in that kind of environment.

Just remember coke is tight and remember there’s sometimes as we go through this we remind people there’s several different grades of coke. What we’re talking about is the high grade which is limited, is tight, and which we use to make great electrodes of our customers and many of our customers have the largest DAF furnaces, they want productivity.

So it’s that segment of needle coke we’re talking about. And that segment is tight.

There’s a handful of producers and they’ve got other alternatives to use those assets and so we expect that price to be up significantly in ’09.

Okay. And then knowing that the price is going up, should we assume that you’re going to continue to buy needle coke until the year end?

Or should we assume that you’re going to cut back in the 12 to 15 percent range, similar to what you’re cutting back your production?

No. we have a contact in place and well take all those orders.

We need that coke; we’ve been planning on getting that coke. So we’ll take those orders as committed.

Great. Thanks very much.

Thanks, Yvonne. Have a good day.

Good afternoon, guys. Hey, Shaun , how are you today?

And Kelly. I know in the past you guys have stated when you go to build the book even though it’s taking longer this time that the spot price is usually the starting negotiation point.

Is that still the case in this environment? I know you guys put out something in July, around 9500 a metric ton.

When those when that book begins building, is that where you start? At that price level?

Yes. That’s been the history, absolutely.

That’s been the starting point, and then negotiations are underway. There are bids and quotes given around the world.

And then a book gets built. So Shaun, I would expect the same kind of process once the destocking finishes and that gets under way.

And then as I said time will tell where that finishes up for ’09.

Okay. And just looking at the spot price increase that happened in ’08 I think if I have it correct that 8500 about to the 9500 about from May to July.

How much of that was demand versus cost driven?

The majority of that was cost driven.

Okay.

The majority of that was cost driven.

So clearly the focus on the call is obviously needle coke increases but clearly the spot price that you guys were putting out there in July was reflecting significant potential need of coke increases as well.

That’s right. Anticipated increases in needle coke, metallurgical coke, some of the tars.

And as we sit here today I would expect all those to be up significant double digit.

Okay. Great.

And then have you seen more customers come in maybe today and doing smaller order quantities instead of committing to the book of business for ’09? I mean obviously steel is being produced.

And if you’re selling those smaller quantities are they at that spot price?

No Shaun; we’re not seeing that. Literally what we’re seeing is no market at all out there.

Our customers worldwide and as I said before, not just steel but I think virtually every industry is going through some significant destocking. Because no one knows what’s the real demand for their product or industry in ’09.

So I don’t see much of any orders, but I also don’t see much of what you mentioned. Gee, are some customers that usually get 5000 tons in a year, are they coming in and giving me 300?

No. I don’t see that.

And remember, our product’s critical to our customer. You’ve got to have it to melt strapped steel.

So generally what our customers do is they assess their annual requirements, which now may not happen until some time in Q1, because of the market, and then they go ahead and book for the year. And that’s what our typical customer does.

Because they want to know the cost, they want to know their cost structure, they want to be assured of supply. And because it’s 2 or maybe 3 % of their cost structure, it’s an item they want to put away and be done with get the electrodes, quality supply, be assured to get that supplied where they want it and then go ahead and make their money in steel.

Okay. But just, if somebody did come in next week with an order, would it be how would you price that?

Would it be at that price?

It would be at that spot price. 94.75.

Okay. Great.

Thanks, guys, I appreciate it.

Thanks, Sean, have a good day.

Yes. Thank you for taking the follow-up question.

I just wondered what is metallurgical coke as a percent of total cost? How much percent is that?

Paresh, it’s not a guidance item we’ve given historically. Obviously it’s a smaller one, it’s a single digit percentage of our cost structure.

But it’s an important item. And it’s an item over the last few years that we’ve seen 100, 200 % cost increases.

So it’s a small percentage but it’s gone up dramatically. But I just highlight that— I expect that to be up double digit in ’09 versus ’08.

Metallurgical coke?

Needle coke.

Okay. Because that’s surprising because we are seeing the demand from key sectors falling off for the metallurgical coke.

And eventually the drivers for the commodity are such which will basically see it falling off. So it’s pretty surprising to be expecting that it will increase.

Paresh, what we see is as some BOF facilities get shuddered and closed, they’re the source of this metallurgical coke. And so as they get shuttered slow down and close and some of them permanently closed, they no longer have the metallurgical coke.

So the price stays very firm. So time will tell where that comes, but right now I think if you go out and get met coke it’s still very pricy.

Okay. And lastly, do you mean that a (inaudible) portion of the EF production is down.

So what percent of graphite electrodes would have to probably close down, to sustain the prices and margins that existed in the earlier part of the year? Any idea?

Paresh, that’s another one where we’re going to have to wait. Time will tell.

There are so many variables in that, it would not be prudent to try and guess what that is. And so I think we’ve got to be patient and let us go ahead and build our raw material portfolio, build our book and then come out with our guidance last year.

Okay. Okay.

Okay, and finally when you say that last year’s production is the low cost metallurgical percent (inaudible) of blast furnace, so can I assume that the top quartile of the cost of DAF producers would be existing in that quartile?

Well, I would look at it this way. I would think that around the world there’s a number of very high cost BOF furnaces that are small in today’s standards.

They were built some 40, 50 years ago.

Right.

They do not have the appropriate abatement systems on them. And I think in downturns as we’re seeing now these types of furnaces go under extreme analysis— gee should we really continue that, or take it completely out of service.

And I think we’ll see some of that activity. I think we’re already starting to see it in China.

And there are examples of that happening last month, this month in China.

Right, right. And most of this is in China or probably other parts of the world also?

Oh, other parts also. It think you’re going to see some of that in Europe and in the U.S.

Okay.

Absolutely. Europe’s signed the Kyoto Accord and those BOF furnaces, some of them are 40, 50 years old and they may not make this downturn.

Which is probably net net good I think for the environment there and of course DAF will be the beneficiary

Okay, fine. Fine.

Thanks. Thanks.

Thanks, Paresh. Have a good day.

Thanks. You too.

Yes. Craig you actually hit on one other question which I had which is related to the spot market pricing.

Given that the current demand is turned down so much, you indicated that you’re still getting pretty high spot market prices. But your needle coke costs haven’t risen just yet.

Are your competitors also keeping a fairly high spot market price for graphite electrodes?

I can’t speak for them but if we get small, one-off order, it’s priced at spot. And so today, that’s still a high price.

We’ve had very little of that. You should think of our market as really very little activity right now.

Okay.

Very little activity. And it’s really the destocking’s underway.

Okay. Thanks, guys.

Thank you. Thanks, Lavon.

Dianna, thank you very much. Everyone thank you very much for joining our call.

I look forward to talking to you in Q1 next year when we’ll report the full ’08 and then give guidance on ’09. Thank you very much have a good day.