EAF — GrafTech International Ltd.

Summary of GrafTech International's Q1 2026 Earnings Call

1. Key Financial Results and Metrics

• Net Loss: $43 million, or $1.66 per share.
• Adjusted EBITDA: Negative $14 million, compared to negative $4 million in Q1 2025.
• Production Volume: 29,000 metric tons, with a capacity utilization rate of 65%.
• Sales Volume: 28,000 metric tons, a 14% increase year-over-year, with a notable 37% growth in the U.S.
• Average Selling Price: Approximately $3,900 per metric ton, down 5% year-over-year and 2% sequentially.
• Cash Costs: $3,848 per metric ton, a 4% sequential decline from Q4 2025.
• Liquidity: Total liquidity of $329 million, including $120 million in cash and $108 million available under the revolving credit facility.

2. Strategic Updates and Business Highlights

• GrafTech is increasing graphite electrode prices by $600 to $1,200 per metric ton to address pricing discrepancies in the market.
• The company is advocating for fair trade policies and is involved in trade cases against unfair imports from China and India.
• GrafTech's vertical integration with Seadrift ensures a secure supply of petroleum needle coke, mitigating some cost pressures.
• The company is positioned to benefit from the increasing demand for electric arc furnace (EAF) steelmaking and the growth of synthetic graphite and needle coke markets.

3. Forward Guidance and Outlook

• GrafTech expects modest year-over-year cash cost reductions and anticipates achieving cash costs of approximately $3,600 to $3,700 per metric ton.
• The company projects a 5% to 10% year-over-year increase in total sales volume for 2026, with over 85% of anticipated volume already committed.
• Positive pricing momentum is expected to materialize in the second half of 2026, particularly during upcoming negotiations for 2027 pricing.

4. Bad News, Challenges, or Points of Concern

• The company reported a net loss and negative adjusted EBITDA, indicating ongoing financial challenges.
• Average selling prices have declined, impacting revenue.
• Geopolitical conflicts and energy market volatility are creating uncertainty, particularly affecting input costs and logistics.
• The extended duration of conflicts in the Middle East could lead to sustained increases in key input costs, necessitating further price adjustments.
• There are concerns regarding potential oversupply in the electrode market and competitive pressures from other producers.

5. Notable Q&A Insights

• The company confirmed it is nearly fully hedged on EU energy costs for 2026, mitigating some risks.
• There is an expectation of increased needle coke prices in the second half of the year due to rising oil prices and supply disruptions.
• GrafTech's pricing actions are gaining traction, with limited volumes affected in Q2, but significant impacts expected in Q3 and Q4.
• Steelmakers are shortening supply lines, driven by concerns over supply security and rising costs, which may benefit GrafTech.
• The timing of trade rulings from the ITC is expected to align with upcoming pricing negotiations, potentially enhancing GrafTech's market position.

Overall, GrafTech is navigating a challenging environment marked by financial losses and external pressures but is taking strategic steps to position itself for recovery and long-term growth.