GrafTech International Ltd.

Second-quarter net sales were $127 million, down 3% year over year. Adjusted EBITDA was $2 million versus $3 million in the prior-year period. Sales volume increased 8% year over year to about 31,000 metric tons, and U.S. sales volume rose 29%. Production volume exceeded 33,000 metric tons, with capacity utilization at 74%, the highest quarterly level since 2022. Weighted average realized pricing was about $3,900 per metric ton, flat sequentially and down about 7% year over year. Cash COGS per metric ton declined about 9% sequentially and 6% year over year. Net cash used in operating activities was $69 million, and adjusted free cash flow was negative $75 million. The company ended the quarter with about $253 million of total liquidity, including $145 million of cash and about $108 million of revolver availability. For the full year, GrafTech still expects sales volume growth of 5% to 10%, a modest year-over-year reduction in cash COGS, and about $35 million of capital expenditures. Management also said it expects the second quarter to be the highest level of cash usage in 2026, with operating cash flow improving in the second half as inventories normalize.

Tim Flanagan framed the quarter as continued execution on GrafTech’s strategic plan, highlighting volume growth, higher utilization, lower manufacturing costs, and stronger commercial discipline. He was constructive on industry trends, citing improving steel fundamentals outside China, rising trade protections, and the early traction of the company’s pricing actions. His tone was confident and assertive, with repeated emphasis that GrafTech is prepared to adjust supply and push pricing to protect long-term economics.

Rory O'Donnell focused on the mechanics behind the quarter: production above 33,000 metric tons, sales volume around 31,000 metric tons, and utilization at 74%. He said cash COGS per metric ton fell 9% sequentially and 6% year over year, and reiterated full-year expectations for a low single-digit percentage reduction in cash COGS and about $35 million of capex. On liquidity, he said GrafTech drew the remaining $100 million under its delayed draw term loan, ending with about $253 million of total liquidity, and noted there are substantially no debt maturities until December 2029. He also said the company filed a shelf registration and set up an ATM program as optional financing tools, while emphasizing that second-quarter cash use should be the peak for 2026.

Analysts pressed on whether the stronger U.S. shipment performance reflected pull-forward demand, and management said some pull-in occurred but that new orders for the third and fourth quarters also point to continued U.S. strength. Questions on inflation and needle coke costs led management to say they are seeing $200 to $300 per ton increases in the market and expect similar pressure ahead, but GrafTech is partially insulated by its captive needle coke supply and procurement actions. Analysts also asked about industry utilization and potential cutbacks; management said the electrode market is still oversupplied and that GrafTech may reduce production further if the market requires it. On pricing, management said the first-quarter increase was only the first step and that stronger acceptance so far gives them a better starting point for 2027 negotiations, while trade duties could support a price floor.