A graphite electrode is a thick, rod-like conductor made from processed carbon used to carry very high electric current into industrial furnaces, most commonly to melt scrap metal in steelmaking. Think of it like the hot coil in an electric stove that delivers intense heat — its availability and price directly affect steel and metal production costs, plant output and margins, so shifts in supply, demand or raw-material costs can influence the profits and share prices of manufacturers and users.
BROOKLYN HEIGHTS, Ohio--(BUSINESS WIRE)--
GrafTech International Ltd. (NYSE: EAF) ("GrafTech," the "Company," "we," or "our") today announced it has informed customers that graphite electrode prices will increase by a minimum of $600 to $1,200 per metric ton, depending on region, effective immediately on uncommitted volume.
Over the past three years, market prices for graphite electrodes have declined significantly in each of our key regions and remain below sustainable levels necessary to support continued investment and reliable long-term supply for our customers. In addition, current geopolitical developments are driving increases in our key input costs, including oil‑based raw materials, energy and logistics.
GrafTech has executed a number of strategic initiatives to structurally improve our cost position and operational efficiency. Despite these efforts, our pricing needs to improve. This price increase by GrafTech represents a necessary step to restore pricing on GrafTech’s products to levels that we expect will safeguard our regional graphite electrode production and continuity of supply for our customers.
“After a prolonged period of pricing pressure, coupled with rising input costs, a reset in graphite electrode pricing is necessary,” said Timothy Flanagan, Chief Executive Officer and President. “While we have taken significant actions to improve our cost structure, this price increase supports reliable supply for our customers, the long-term sustainability of our operations and the creation of shareholder value.”
About GrafTech
GrafTech International Ltd. is a leading manufacturer of high-quality graphite electrode products essential to the production of electric arc furnace steel and other ferrous and non-ferrous metals. We believe the Company has a competitive portfolio of low-cost, ultra-high power graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world. We are the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke, our key raw material for graphite electrode manufacturing. This unique position provides us with a number of competitive advantages.
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We believe that these factors include, but are not limited to: our dependence on the global steel industry generally and the electric arc furnace steel industry in particular; the cyclical nature of our business and the selling prices of our products, which may remain at depressed levels or further decline in the future, and may continue to experience prolonged periods of reduced profitability and net losses or adversely impact liquidity; the possibility that we may be unable to implement our business strategies in an effective manner, including our ability to effectively increase or maintain existing prices and shift sales to regions with higher average selling prices; continued overcapacity of the global graphite electrode industry, which may further adversely affect graphite electrode prices; the competitiveness of the graphite electrode industry; our dependence on the cost and availability of manufacturing inputs, including raw materials, such as decant oil, petroleum needle coke, energy and freight, and disruptions in availability for such inputs; the cost of electric power and natural gas, particularly in Europe; the legal, compliance, economic, social and political risks associated with our substantial operations in multiple countries; the possibility that fluctuation of foreign currency exchange rates could materially harm our financial results; the impact of inflation and our ability to mitigate the effect on our costs; the impact of macroeconomic and geopolitical events on our business, results of operations, financial condition and cash flows, and the disruptions and inefficiencies in our supply chain that may occur as a result of such events; and uncertain shifts in domestic and foreign trade policies and the possibility that the imposition of current, new or increased custom duties and tariffs and trade barriers in the countries in which we, our customers and our suppliers operate could adversely affect our ability to compete, operations, results of operations and financial condition. These factors should not be construed as exhaustive and should be read in conjunction with the Risk Factors and other cautionary statements that are included in our Annual Report on Form 10-K, our Quarterly Reports on Form 10-Q and other filings with the SEC. The forward-looking statements made in this press release relate only to events as of the date on which the statements are made. Except as required by law, we do not undertake any obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, our actual results may vary materially from what we may have expressed or implied by these forward-looking statements. We caution that you should not place undue reliance on any of our forward-looking statements. You should specifically consider the factors identified in this press release, in our Annual Report on Form 10-K and in our Quarterly Reports on Form 10-Q that could cause actual results to differ before making an investment decision to purchase our common stock. Furthermore, new risks and uncertainties arise from time to time, and it is impossible for us to predict those events or how they may affect us.
