EAF Delivers 9% Sales Volume Growth and Cost Reductions: U.S. Expansion Leads Third Quarter Recovery
Sales Growth Driven by U.S. Expansion and Strategic Market Shifts
GrafTech International (NYSE:EAF) reported notable progress for the third quarter of 2025, with sales volume rising 9% year-over-year to 28,800 metric tons. A key highlight was a 53% year-over-year surge in U.S. sales volume—a result of the company’s proactive shift toward regions with more robust pricing and resilient steel industry demand. This approach allowed EAF to offset persistent global pricing challenges and reflected an agile response to evolving market conditions.
Cost Management Efforts Pay Off: 10% Reduction in Cash Cost per Metric Ton
The company’s ability to control costs stood out. Cash cost of goods sold per metric ton declined by 10% compared to the prior year, landing at $3,795 per metric ton for the third quarter. This reduction helped cushion the impact of a 7% decrease in weighted-average realized prices, as EAF maintained production flexibility and continued to focus on higher-margin business.
| Metric | Q3 2025 | Q3 2024 | Y/Y Change |
|---|---|---|---|
| Sales Volume (k MT) | 28.8 | 26.4 | +9% |
| Net Sales ($M) | 144.0 | 130.7 | +10% |
| Cash Cost/MT ($) | 3,795 | 4,197 | -10% |
| Adjusted EBITDA ($M) | 13.0 | (6.2) | +19.2 |
| Adjusted Free Cash Flow ($M) | 18.4 | 19.7 | -7% |
| Total Liquidity ($M) | 384 | N/A | N/A |
Adjusted EBITDA Turns Positive as Cost Discipline Counters Price Pressure
Third quarter adjusted EBITDA jumped to $13 million—bolstered by both higher sales volume and an $11 million benefit from the resolution of a longstanding commercial issue. Net sales for the period rose to $144 million (including the $11 million one-time gain), reflecting operational momentum even as realized pricing remained subdued.
Net loss narrowed year-over-year to $28 million (from $36 million), and adjusted free cash flow stayed healthy at $18 million, underpinning GrafTech’s efforts to stabilize amid a tough pricing environment.
Balance Sheet Strength Provides Flexibility for Uncertain Markets
Liquidity at quarter end stood at $384 million, combining cash, revolver capacity, and term loan availability. Gross debt totaled $1.13 billion, with no significant maturities due until late 2029, giving EAF flexibility to manage ongoing volatility in steel and electrode markets. This strong financial base has enabled disciplined working capital management, supporting consistent cash generation despite market pressures.
Geographic Diversification and Cost Focus Shape Outlook
EAF’s forward guidance anticipates 8-10% sales volume growth for the full year, slightly below earlier expectations but driven by a conscious decision to forego low-margin sales opportunities. Pricing headwinds persist, especially in Europe, yet actions to optimize production, streamline schedules, and prioritize U.S. growth continue to yield tangible benefits.
Looking further ahead, management remains optimistic about demand for graphite electrodes amid the steel industry’s move toward electric arc furnaces and global decarbonization trends. Investments in U.S. expansion and vertical integration into petroleum needle coke supply (through the Seadrift facility) aim to position EAF to capitalize on structural changes in steel and EV battery markets.
Key Takeaway: Cost Cuts and U.S. Sales Strategy Offset Industry Pressures
GrafTech’s third quarter results spotlight effective execution on cost reduction, a proactive shift in geographic sales mix, and a resilient balance sheet—positioning the company to navigate near-term challenges and benefit from anticipated long-term growth drivers in steelmaking and battery markets.
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