GrafTech International(US:EAF)2025-04-25 15:02Financial Data and Key Metrics Changes - The company reported a net loss of $39 million or $0.15 per share for Q1 2025, with adjusted EBITDA at negative $4 million compared to flat adjusted EBITDA in Q1 2024 [32] - Cash COGS per metric ton was approximately $3,650 for Q1 2025, reflecting a 21% year-over-year reduction [34] - Total liquidity at the end of Q1 2025 was $421 million, consisting of $214 million in cash and $207 million in available credit [36] Business Line Data and Key Metrics Changes - Sales volume increased by 2% year-over-year in Q1 2025, with a notable 25% increase in the U.S. market [7][10] - Average selling price for Q1 2025 was $4,100 per metric ton, representing a 20% year-over-year decline [28] - Production volume for Q1 was 28,000 tons, with a capacity utilization rate of 63%, a more than 500 basis point increase from the prior year [25][26] Market Data and Key Metrics Changes - Global steel production outside of China was approximately 209 million tons in Q1 2025, slightly below the previous year [24] - U.S. steel production saw a 1% reduction in Q1 2025, while the EU experienced a 3% decrease year-to-date [24][25] - The company increased sales volume in Western Europe by more than 40% year-over-year in Q1 2025 [30] Company Strategy and Development Direction - The company is focused on increasing sales volume, regaining market share, and improving financial performance through strategic initiatives [6][9] - A key goal is to grow volume and market share in the U.S., which is the highest-priced region in the industry [9][10] - The company plans to increase prices by 15% on uncommitted volumes for 2025 to restore pricing and profitability levels [11] Management's Comments on Operating Environment and Future Outlook - Management acknowledged challenging near-term market conditions but expressed optimism about future opportunities [6][7] - The company is well-positioned to capitalize on potential recovery in the EU market due to supportive policy changes and infrastructure investments [39][40] - Management emphasized the importance of a healthy graphite electrode industry for the steel industry and the need for improved pricing dynamics [8][10] Other Important Information - The company has made significant strides in reducing costs, achieving a 23% year-over-year reduction in cash COGS per metric ton in 2024 [13] - The company is actively managing its production and inventory levels to align with sales expectations [26][35] - Ongoing assessments of global trade policies and tariffs are being conducted to mitigate potential impacts on the business [14][18] Q&A Session Summary Question: Has the introduction of tariffs on Indian material changed the pace of pricing declines in the U.S. market? - Management indicated that tariffs on Indian imports could significantly impact the availability of competitors in the U.S. market, potentially benefiting the company [46][47] Question: What percentage of sales are now coming from the U.S. and Western Europe? - Management confirmed that over 50% of sales are now derived from the U.S. and Western Europe combined [54] Question: How much of the graphite electrodes sold in the U.S. are sourced from outside the U.S.? - Management estimated that roughly half of the production coming into the U.S. is from the Monterrey facility, with the balance from European facilities [81] Question: What is the outlook for pricing of graphite electrodes and needle coke? - Management expressed optimism for future pricing stability, citing potential support from tariffs and ongoing negotiations with customers [72][75]