Graftech Intl ((EAF)) has held its Q3 earnings call. Read on for the main highlights of the call.
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During GrafTech International’s latest earnings call, the sentiment was a mix of optimism and caution. The company showcased strong sales volume growth, particularly in the U.S., and highlighted significant cost reductions. However, challenges with pricing dynamics led to a reported net loss for the quarter. While the steel industry shows signs of potential recovery, current market conditions remain difficult.
Significant Sales Volume Growth
GrafTech reported a notable 9% year-over-year increase in sales volume for the third quarter of 2025, reaching nearly 29,000 metric tons. This growth is part of a broader trend, with the company on track to achieve over 20% cumulative sales volume growth since the end of 2023.
U.S. Market Expansion
The U.S. market has been a bright spot for GrafTech, with sales volume growing by 53% year-over-year in the third quarter. Year-to-date growth stands at 39% compared to last year, underscoring the company’s successful expansion efforts in this key region.
Cost Reduction Achievements
GrafTech achieved a 10% year-over-year reduction in cash cost per metric ton for Q3 2025. The company is on track for more than a 30% cumulative reduction in cash cost per metric ton since the end of 2023, reflecting its ongoing focus on cost efficiency.
Positive Cash Flow and Liquidity Position
The company generated $25 million in net cash from operating activities and $18 million in adjusted free cash flow. As of the end of September 2025, GrafTech’s liquidity position was strong at $384 million, providing a solid foundation for future operations.
Steel Industry Outlook
Early signs of a rebound in the steel markets are emerging, with projected demand growth in the U.S. and Europe for 2026. This potential recovery could positively impact GrafTech’s future performance.
Challenging Pricing Dynamics
Despite strong sales, GrafTech faced a 7% decline in the average selling price for Q3, primarily due to increased low-priced graphite electrode exports from China. This pricing pressure remains a significant challenge for the company.
Net Loss for the Quarter
GrafTech reported a net loss of $28 million, or $1.10 per share, for the third quarter of 2025. This loss highlights the impact of challenging market conditions and pricing dynamics on the company’s financial performance.
Excess Electrode Capacity
The global market continues to grapple with an unsustainably high level of excess electrode capacity, exacerbated by low-priced exports from China and other regions. This oversupply remains a critical issue for GrafTech and the industry.
Forward-Looking Guidance
Looking ahead, GrafTech remains focused on strategic shifts and geographical sales optimization to mitigate pricing pressures. The company maintains a positive outlook on future sales volume growth and market share gains, despite the challenging market environment. The emphasis on cost reductions and liquidity strength positions GrafTech to navigate these challenges effectively.
In summary, GrafTech’s earnings call reflected a blend of positive developments and ongoing challenges. While the company achieved impressive sales growth and cost reductions, pricing pressures and market conditions resulted in a net loss for the quarter. Nonetheless, GrafTech’s strategic initiatives and strong liquidity position provide a foundation for potential future success.