GrafTech International Ltd.

What they do

GrafTech produces ultra-high power (UHP) graphite electrodes and connecting pins used as consumable conductors in electric arc furnace (EAF) steelmaking, plus petroleum needle coke, its key raw material. Its only reportable segment is Industrial Materials, comprising graphite electrodes and petroleum needle coke products. Manufacturing is concentrated in Calais, France; Pamplona, Spain; and Monterrey, Mexico, with the St. Marys, Pennsylvania facility idled in 2024. Stated production capacity as of December 31, 2025 was approximately 178 thousand metric tons through the three primary facilities.

Revenue drivers

• Graphite electrodes — Primary product line within the single Industrial Materials segment; electrodes conduct electricity in EAF furnaces and are an essential consumable representing less than 2% of a typical EAF's steel production cost. Sold to EAF steel producers globally, with sizes up to 31.5 inches in diameter.
• Petroleum needle coke products — Second major product category and GrafTech's key raw material; the company is the only large-scale graphite electrode producer substantially vertically integrated into petroleum needle coke. Supports internal electrode production and provides a competitive cost position.
• Connecting pins — Graphite pins that fasten electrodes into a column within the furnace; majority produced at Monterrey, Mexico, with alternative capacity at Pamplona, Spain. Part of the graphite electrode product offering rather than a separate reported segment.
• Regional sales mix (U.S. versus other regions) — 2025 sales volume was approximately 109 thousand MT and weighted-average realized price was approximately $4,100 per MT; the company has been shifting more volume to the United States, which it describes as the strongest region for graphite electrode pricing.

Recent performance

Second quarter 2026 sales volume was 30.8 thousand MT, up 8% year-over-year and 10% sequentially, while net sales of $127 million fell 3% year-over-year because lower weighted-average realized pricing more than offset higher volume. Net loss was $40 million, or $1.54 per share, compared with a net loss of $87 million, or $3.35 per share, in Q2 2025, which included a $43 million non-cash income tax charge for a valuation allowance against U.S. and Switzerland deferred tax assets. Adjusted EBITDA was $2 million versus $3 million a year earlier. Net cash used in operating activities was $69 million and adjusted free cash flow was negative $75 million, reflecting semi-annual interest payments and a planned inventory build. First half 2026 net sales were $252 million with a net loss of $84 million.

Strategy

Management is pursuing higher realized pricing through disciplined commercial actions, including a previously announced price increase on uncommitted volume, and is focusing its mix toward higher-value opportunities. It is supporting trade policy reform in key markets and shifting sales volume toward the United States. The company is also working on production efficiency and cost structure improvements while maintaining flexibility to adapt operating plans. A 1-for-10 reverse stock split was effected August 29, 2025, primarily to maintain NYSE minimum bid price compliance.

Risks

• Cyclical EAF steel demand — GrafTech depends on the global EAF steel industry, which is highly cyclical; weakening steel demand or customer financial distress would reduce electrode orders.
• Depressed and competitive pricing — Global graphite electrode overcapacity and aggressive competitor pricing have driven realized prices to levels management describes as unsustainably low, with 2025 weighted-average price down about 13% year-over-year.
• Liquidity and leverage — At June 30, 2026 the company had $145.4 million of cash, total liquidity of $253 million, $1.20 billion of long-term debt, and shareholder equity of negative $345.6 million, alongside continuing cash used in operations.
• Single-site pin production — GrafTech relies primarily on its Monterrey, Mexico facility for connecting pin production, so a disruption there could affect electrode supply.

Outlook

Management reaffirmed full-year 2026 volume expectations and continues to expect a 5% to 10% year-over-year increase in sales volume, with roughly 65% of anticipated 2026 volume committed in the order book as of the 10-K. For the first quarter of 2026 the company projected a roughly 10% year-over-year volume increase. Management expects a slight increase in global (excluding China) graphite electrode demand in 2026, supported by modest steel demand recovery, U.S. trade policy and European trade protections.