Overview

GrafTech International Ltd (EAF) continues to struggle amid a challenging operating environment marked by weakness in demand for graphite electrodes, which are largely used in the electric arc furnace for production of steel. The demand for graphite electrodes is influenced by cyclicality in the steel sector, which is expected to continue at the bottom of the cyclical curve in FY25, with hopes of increasing later as decarbonization and infrastructure expansion improves.

In 2Q24, sales volume fell 3% year-over-year (YoY) to 26,000 MT, while average selling price for non-long-term agreements (non-LTA) declined 23% YoY, largely due to muted demand resulting from a slump in global steel production. Consequently, S&P downgraded EAF twice in the last six months, placing it at CCC+ as of 23 August 2024.