GrafTech International Q2 Earnings Call Highlights

GrafTech International NYSE: EAF reported higher graphite electrode sales volumes and improved manufacturing utilization in the second quarter of 2026, while lower realized pricing continued to weigh on sales and earnings. Chief Executive Officer Tim Flanagan said the company made progress on its commercial, operational and cost initiatives during the period. Sales volume rose 8% from a year earlier, including a 29% increase in the United States, while production exceeded 33,000 metric tons and capacity utilization reached 74%, the company’s highest quarterly utilization rate since 2022. “The second quarter marked another period of meaningful progress for GrafTech,” Flanagan said, citing higher volume, increased production and further manufacturing cost improvements. The company reaffirmed its full-year expectations for sales-volume growth and lower cash cost of goods sold per metric ton. Volume Growth Offset by Lower Pricing Second-quarter sales volume totaled about 31,000 metric tons, up 8% year over year and 10% sequentially. Chief Financial Officer Rory O’Donnell said the company’s volume performance remains consistent with its forecast for full-year sales-volume growth of 5% to 10%. Net sales fell 3% from the prior-year period to $127 million. The increase in shipments was offset by lower weighted-average realized pricing, which was about $3,900 per metric ton. That figure was flat sequentially but 7% below the second quarter of 2025. GrafTech said the current average realized price largely reflects customer commitments made before its late-March pricing action. The company said more than 90% of anticipated volume is already committed in its order book, mostly at prices reflecting market conditions at the end of 2025. However, Flanagan said customer commitments secured following the price-increase announcement were, on average, more than 15% above prices achieved previously. Those commitments are expected to affect reported pricing as associated orders ship in future periods. O’Donnell said each $100-per-metric-ton increase in average selling price, based on current utilization rates, would equate to roughly $12 million in incremental annual cash flow. He said the recent pricing progress provides a stronger starting point for 2027 contract negotiations, though the impact on 2026 reported pricing is expected to be modest. Costs, Cash Flow and Liquidity Cash cost of goods sold per metric ton declined about 9% sequentially and 6% from the prior-year quarter, driven by improved production efficiency, higher utilization and cost-reduction efforts. GrafTech maintained its full-year forecast for a low-single-digit percentage reduction in cash costs per metric ton. O’Donnell said production exceeded sales volume by approximately 4,000 metric tons year to date as the company built inventory ahead of seasonal maintenance at.