EAF — GrafTech International Ltd.

Summary of GrafTech International Ltd. Q4 2025 Earnings Call

1. Key Financial Results and Metrics

• Sales Volume: Q4 sales volume was approximately 27,000 metric tons, flat year-over-year, with a full-year increase of 6%. US sales volume grew 48% in 2025.
• Average Selling Price: Q4 average selling price was approximately $4,000 per metric ton, a 9% decline year-over-year and a 5% decline sequentially.
• Cash Costs: Q4 cash costs per metric ton were $4,019, reflecting a 2% year-over-year decline. Full-year cash costs were just over $3,800 per metric ton, an 11% reduction compared to 2024.
• Net Loss: Q4 net loss was $65 million ($2.50 per share), compared to a net loss of $49 million ($1.92 per share) in the prior year. Adjusted EBITDA was negative $22 million.
• Liquidity Position: Ended 2025 with total liquidity of $340 million, including $138 million in cash.

2. Strategic Updates and Business Highlights

• Market Strategy: GrafTech focused on growing market share in the US, achieving an 83% increase in Q4 US sales volume year-over-year. The company is prioritizing regions with stronger pricing fundamentals.
• Cost Management: Achieved an 11% reduction in cash cost of goods sold per metric ton for 2025, with cumulative reductions of 31% since 2023.
• Safety Performance: Improved total recordable incident rate to 0.41, marking the best safety performance on record.
• Geopolitical and Trade Dynamics: The company is actively engaging in trade discussions and evaluating potential partnerships to navigate market challenges.

3. Forward Guidance and Outlook

• Sales Volume Growth: Expecting a 5% to 10% increase in sales volume for 2026, with approximately 65% of anticipated volume already committed.
• Cost Management: Anticipating a low single-digit percent year-over-year decline in cash costs per metric ton in 2026.
• Capital Expenditures: Projected capital expenditures for 2026 are approximately $35 million.

4. Bad News, Challenges, or Points of Concern

• Market Environment: The graphite electrode industry is facing significant challenges, including global overcapacity, aggressive competitor pricing, and geopolitical uncertainties.
• Pricing Pressures: Pricing levels are unsustainably low, driven by excess supply from China and India, which threatens the long-term viability of the industry.
• Net Losses: Continued net losses and negative cash flow from operations indicate ongoing financial strain.
• Competitor Behavior: Increased aggressive pricing tactics from competitors, particularly in regions outside the US, are creating a challenging competitive landscape.

5. Notable Q&A Insights

• Pricing Dynamics: Management acknowledged that aggressive pricing behavior is prevalent globally, driven by imports and excess capacity, particularly from China and India.
• Quality vs. Price: GrafTech is focused on maintaining quality and service as differentiators, but they face challenges in markets where price is the primary consideration.
• Capacity Additions: While no new supply has come online in 2025, there are announcements from competitors about future capacity expansions, which could exacerbate supply issues.
• Government Support: GrafTech is engaged in discussions regarding government support for critical minerals and synthetic graphite, emphasizing the importance of establishing a stable supply chain.

Overall, GrafTech is navigating a challenging market environment with strategic initiatives focused on cost management and geographic market shifts, while facing significant pricing pressures and competitive challenges.