GrafTech International (EAF) Q1 2026 Earnings Call Summary

1Key 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.

Sales Volume: 28,000 metric tons, a 14% increase year-over-year.

Production Volume: 29,000 metric tons, with a capacity utilization rate of 65%.

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, but higher than Q1 2025.

Liquidity: Total liquidity of $329 million, including $120 million in cash and $108 million available under the revolving credit facility.

2Strategic Updates and Business Highlights

GrafTech is increasing graphite electrode prices by $600 to $1,200 per metric ton to align with rising steel prices and improve margins.

Over 85% of anticipated 2026 volume is committed in the order book, indicating strong demand visibility.

The company is actively involved in trade cases against unfair imports from China and India, which could bolster domestic pricing and market share.

GrafTech's vertical integration with Seadrift for needle coke supply enhances its competitive position amidst rising input costs.

Safety performance improved, with a total Recordable Incident Rate of 0.35.

3Forward Guidance and Outlook

The company maintains a full-year sales volume growth guidance of 5% to 10%.

Anticipates modest year-over-year cash cost reductions, targeting $3,600 to $3,700 per metric ton by year-end.

Positive pricing momentum is expected to materialize in the second half of 2026, particularly during the 2027 price negotiations.

Global steel demand is projected to grow, with the U.S. expected to see a 1.7% increase in 2026.

4Bad 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 and profitability.

Geopolitical tensions and energy market volatility pose risks to input costs and overall operational stability.

The extended conflict in the Middle East could disrupt supply chains and increase costs further.

There are concerns regarding oversupply in the electrode market, which could pressure pricing despite recent increases.

5Notable Q&A Insights

Cost Inflation: Decant oil constitutes about 25% of production costs, with electricity and natural gas adding another 10-15%. The company is largely hedged against energy price fluctuations for 2026.

Needle Coke Pricing: Anticipated increases in needle coke prices are expected in the second half of 2026 due to rising oil prices and supply disruptions.

Market Dynamics: Steelmakers are shortening supply lines in response to geopolitical risks and rising costs, which may lead to increased regional sourcing.

Trade Case Timing: Preliminary rulings on trade cases against imports from China and India are expected by mid-2026, potentially influencing pricing negotiations for 2027.

Competitive Landscape: GrafTech is successfully winning tenders despite potential oversupply, indicating strong customer recognition of the value of their products. Overall, GrafTech is navigating a challenging environment with strategic pricing initiatives and a focus on operational efficiency, while also preparing for potential market improvements in the latter half of 2026.