GrafTech sees FY24 CapEx $35M-$40M

The company said, “We expect demand for graphite electrodes in the near term will remain weak, reflecting persistent challenges in the commercial environment as steel industry production remains constrained by global economic uncertainty. Given these trends, challenging pricing dynamics have persisted in most regions. As a result, we remain selective in the commercial opportunities we choose to pursue. Sales volume in the Q2 is expected to be broadly in line with sales volume for the first quarter of 2024 and we continue to expect a modest year-over-year improvement in sales volume for the full year. We now expect the year-over-year decline in our full year 2024 cash cost of goods sold per MT to exceed our previous guidance of a low-teen percentage point decline compared to 2023. Reflecting the progress we are making on addressing our cost structure, we now anticipate a mid-teen percentage point decline compared to 2023. The significant improvement in our year-over-year costs reflects the strategic actions we are taking to reduce our fixed manufacturing costs, the benefit of additional actions we are taking to reduce our variable costs, including certain raw materials and energy and the anticipated improvement in our sales and production volume levels. In addition, we continue to closely manage our working capital levels and capital expenditures. We continue to anticipate our full-year 2024 capital expenditures will be in the range of $35M-$40M. Longer term, we remain confident that the steel industry’s accelerating efforts to decarbonize will lead to increased adoption of the electric arc furnace method of steelmaking, driving long-term demand growth for graphite electrodes. We also anticipate the demand for petroleum needle coke, the key raw material we use to produce graphite electrodes, to accelerate driven by its utilization in producing synthetic graphite for use in lithium-ion batteries for the growing electric vehicle market. We believe that the near-term actions we are taking, supported by an industry-leading position and our sustainable competitive advantages, including our substantial vertical integration into petroleum needle coke via our Seadrift facility, will optimally position GrafTech to benefit from that long-term growth.”