Ladies and gentlemen, thank you for standing by. My name is Desiree, and I will be your conference operator today. At this time, I would like to welcome everyone to the GrafTech Third Quarter 2025 Earnings Conference Call and Webcast. [Operator Instructions] I would now like to turn the conference over to Mike Dillon, Vice President of Investor Relations. You may begin.

Thank you, Desiree. Good morning, and welcome to GrafTech International's Third Quarter 2025 Earnings Call. On with me today are Tim Flanagan, Chief Executive Officer; and Rory O’Donnell, Chief Financial Officer. Tim will begin with opening comments, including an update on the commercial environment. Rory will then provide more details on our quarterly results and other financial matters, and Tim will close with additional comments on our outlook. We will then open the call to questions. Turning to our next slide. As a reminder, some of the matters discussed on this call may include forward-looking statements regarding, among other things, performance, trends and strategies. These statements are based on current expectations and are subject to risks and uncertainties. Factors that could cause actual results to differ materially from those indicated by forward-looking statements are shown here. We will also discuss certain non-GAAP financial measures, and these slides include the relevant non-GAAP reconciliations. You can find these slides in the Investor Relations section of our website at www.graftech.com. A replay of the call will also be available on our website. I'll now turn the call over to Tim.

Good morning, and thank you for joining GrafTech's third quarter earnings call. Today, we'll provide an overview of our third quarter performance, share key operational and commercial updates and discuss our outlook for the remainder of 2025 and beyond. I'm pleased to share that GrafTech delivered another quarter of meaningful progress in the third quarter of 2025, reflecting our team's commitment to disciplined execution and operational excellence in a challenging market environment. During the quarter, we achieved 9% year-over-year increase in sales volume, reaching nearly 29,000 metric tons. To achieve this, we are actively leveraging our strong customer value proposition and capitalizing on the commercial momentum we have built to expand our market share and drive continued volume growth. In fact, reflecting our full revised full year 2025 sales volume guidance that Rory will speak to in a few moments, we are on track to achieve cumulative sales volume growth of over 20% since the end of 2023. This is impressive growth in any market, but is particularly noteworthy given that graphite electrode demand has remained relatively flat for the past 2 years. It's a clear indication that our customer value proposition is compelling and we're outperforming the broader market. In addition, we continue to focus on optimizing our geographic sales mix, particularly in the United States, where our sales volume grew by 53% year-over-year in the third quarter. This strategic shift towards the U.S. market, which remains the strongest region for graphite electrode pricing is a direct result of our efforts to capture opportunities in regions with more favorable pricing dynamics and to strengthen our competitive position. On the cost side, we delivered a 10% year-over-year reduction in our cash cost per metric ton for the third quarter and increased our full year guidance for cost reductions, as Rory…

Thank you, Tim, and good morning, everyone. Starting with our operations. Our production volume for the third quarter was approximately 27,000 metric tons, resulting in a capacity utilization rate of 63%, while representing a modest sequential decline in production compared to the prior 2 quarters. This was planned as annual maintenance activities at our European manufacturing facilities occurred during the third quarter, consistent with our historical practice. On a full year basis, our expectation remains to balance our production and sales volume levels. Turning to our commercial performance. In the third quarter, our sales volume was approximately 29,000 metric tons. This is a 9% year-over-year increase and represented our highest sales volume performance in 12 quarters. Of particular note is our success in actively shifting a significant portion of our volume to the U.S. as we have discussed. For Q3, our sales volume within the U.S. grew 53% year-over-year. Year-to-date, we have grown sales volume in this region by 39% compared to last year. This is an impressive result given year-to-date steel production in the U.S. is up less than 2%. On a full year basis, we now expect our total sales volumes to increase 8% to 10% in 2025. The modest change from our previous guidance of 10% year-over-year sales volume increase reflects our disciplined approach of foregoing volume opportunities where margins are unacceptably low. To this last point, we continue to face challenging pricing dynamics across nearly all of our regions. While this is partially attributable to flat market demand, it further reflects the increased level of low-priced graphite electrode exports from China and others that we have spoken to previously, which has resulted in an unsustainable level of excess electrode capacity in the rest of the world. Against that backdrop, at times, we are making decisions to…

Thanks, Rory. In summary, we laid out a disciplined plan in response to evolving industry dynamics and heightened macro uncertainty, and we're executing against that plan. Our objectives are clear and include to increase our sales volume and gain market share, improve our average pricing, most notably by shifting the geographic mix of our volume to higher-priced regions, to reduce costs and working capital requirements and to ultimately improve our liquidity and strengthen our overall financial foundation. As it relates to our third quarter, we're pleased that our efforts across all of these areas are beginning to translate into improved bottom line performance. This reflects signs of progress and momentum towards accelerating our path back to normalized levels of profitability as the market recovers. To this last point, I spoke earlier here to a number of potential catalysts to support a rebound of the steel market in the near term. Longer term, we remain bullish on the structural tailwinds that support the ongoing shift towards electric arc furnace steelmaking. Globally, based on data published by the World Steel Association, the EAF method of steelmaking further increased its market share in 2024, accounting for 51% of steel production outside of China. This is a continuation of the steady share growth that the EAF industry has experienced for a number of years. And driven by decarbonization efforts, we expect this trend to continue. In the U.S., which produces approximately 80 million tons of steel annually, over 20 million tons of new EAF capacity has either recently come online or is planned for the coming years, with further announcements expected as we move ahead. This will drive further share gains for electric arc furnace steel production in this key region. In the EU, while some European steelmakers have announced temporary delays in their…

[Operator Instructions] And our first question comes from the line of Arun Viswanathan with RBC Capital Markets.

So I guess, first off, I guess -- do we -- should we expect any other kind of deferred revenue benefits? Or what did that arise from? And is that kind of onetime in nature, I guess, first off?

This is Rory. You should not expect any further. I mean, we don't have anything deferred left on the balance sheet. You'll note that in the upcoming disclosures in our SEC filings. So consider it one-time, it relates to long since collected receivable that is no longer going to impact -- or the results going forward.

Sure. And then just on kind of price and volume. So your average price came in a little bit lower than what we were thinking. Mainly that was maybe our own kind of mismatching of your contract roll-offs. But I guess, what do you guys think about the current kind of demand and price environment? It does appear that utilization rates are still kind of globally at a point that wouldn't necessarily support higher electrode pricing? Or maybe you can just comment on that? And if you need to weave in some thoughts on needle coke and how that's progressing as well, that would be helpful?

Yes, Arun, I'll start by saying I'm going to be careful about talking too much about pricing. Certainly, anything forward-looking just given the fact that we're in the middle of our negotiations with customers, both in the U.S. and Europe and globally right now. But I mean, I think we commented quite a bit about this in the second quarter call. I mean it's an oversupplied market right now. And so therefore, that makes it challenging to push pricing in such a market. That being said, I think you're starting to see some positive momentum across the steel industry and whether that's because of infrastructure and defense spending in Europe, whether it's because of trade actions that have been ongoing for now more than 6 or 7 months in the U.S. and recently announced in Europe. I think we're starting to see some momentum where we expect not only steel demand, but also steel production to predict -- to pick up in those regions. So all in all, it still remains a challenging market, but I think we're still optimistic that we'll start to see some more positive momentum on the pricing side as we look out going forward. And certainly, to the longer term, I think we still firmly believe that you're going to see a big influx of additional EAF production I commented on the 20 million tons or so that we're seeing in the U.S. right now already. As it relates to needle coke, needle coke continues to remain relatively flat from an overall pricing perspective globally. And I think, again, that's a reflection of where the electrode market is right now. I think the trade case that you're seeing play out right now in the Department of Commerce against the active anode material in China. The 93.5% tariff rate that we mentioned that will be finalized depending on when the government reopens, Q1 of next year, I think that will start to underpin and give all of the producers of anode material more confidence to continue to invest in their projects. And I think that will continue to support the overall demand for needle coke, and you'll start to see that market tighten up and pricing improve, and that will have a knock-on effect into the electrode market. So it's where we are today, and I think greener pastures ahead as we look out into the future.

Great. And then if I could just ask on the idea of supplying into the battery-related materials market. I guess you just mentioned that the market is oversupplied for electrodes. So I guess, is there any way to accelerate the commercial applications? Where are you on that timeline? And we've been in an oversupplied market on electrodes for a while now. So is there any limitations to moving forward to pivot some of your portfolio into that market as well? I think our understanding is that you guys have maybe 180,000 tons plus of capacity and maybe 130,000 tons is used in electrodes. So there does appear to be some latent capacity that you maybe you could direct into that market. What's taking this long? And where are you kind of in that journey?

Yes. No, I think that's a fair question, and I think consistent with what we've said in the past. We continue to develop our capabilities. I think where we have a distinct advantage to the market right now is the vertical integration with Seadrift and the ability to supply needle coke and raw materials into that market. As you noted, there is excess graphitization capacity, both in the U.S. and the EU, given that we're operating at roughly 60% to 65% utilization rates. But to be able to maximize that, you need to have batteries being produced by those that want to be non-Chinese suppliers in those regions, right? And right now, all of the battery material continues to be supplied by the Chinese, which is why that trade case is so critically important to allow those that want to have broader aspirations of producing anode material, establishing battery factories in the U.S. and the EU to be able to support their financing activities and make a market that otherwise is competitive and constructive for them. We've said all along that we don't see ourselves as a stand-alone add-on producer. We're somewhat balance sheet constrained from that standpoint. But I think that we would be a good partner for someone who's looking for raw material supply and/or someone who's looking for interim bridge supply of graphitization capability and/or graphitization expertise given that, that's what we do. So we think there's still opportunities out there. But that market is still developing, and it will take some time. I think the finalization of the trade case next year will be an important milestone to start to see that market unlock itself somewhat. And I think we're still pretty optimistic not only just because of batteries for EVs, but probably equally and almost more importantly is energy storage systems as we look forward on the electricity needs that the world is going to face here, which has been a very popular topic of late.

Our next question comes from the line of Bennett Moore with JPMorgan.

Congrats on the solid quarter. I wanted to start quick on the 50% tariffs on India material. I think those have been in place since August. Have you seen any material impact on imports into the U.S. as a result? And do you think these tariffs could help drive share gains or some of your conversations regarding 2026 commitments?

Yes. Again, I think we're confident, as we said, that we will continue to see gains in the U.S. I think we have a full expectation that we'll continue to grow volume in whole or in total as we head into next year, but we'll continue to focus a lot of energy into the U.S. market. Really, again, as a market that I think customers recognize the value proposition, the technical services, and all of the capabilities we bring to the table. So certainly do think that, that remains an opportunity for us. With respect to the Indian tariffs, right? I think -- that presents an opportunity in the market, right? I think certainly, anybody facing a 50% tariff is going to have a hard time overcoming that economic hurdle and should be supportive for negotiations as we head into those negotiations here in the fourth quarter. And maybe I'll take an opportunity to step back and editorialize a little bit, right? I mean I think both the Chinese and the Indians have really overbuilt their electrode capacity to multiples and multiples greater than their domestic EAF consumption could ever reach and I think if we look back to 2022, the Indians are exporting almost 60% more material than they did then. They've lowered their prices by 40%, the Chinese have lowered their prices by more than 30%. And I think a combination of those reasons and the ongoing war in Russia and the financing of that war through the purchasing of oil as well as the supply of electrodes into the Russian market, really, to me, is a strong reason and basis or justification for keeping those tariffs in place and hope that they don't just become a bargaining chip as the Trump administration works to settle out the trade disputes that are ongoing. So it's an opportunity for us, but certainly look forward to the negotiations here in the fourth quarter with that as a backdrop.

That's great color. And then my last follow-up here is regarding some commentary last quarter, you discussed GrafTech being an attractive candidate for public-private partnership. Since then, we've seen some additional deals unfold, including government entities, providing financial support for the graphite industry. So just wondering if GrafTech's had any sort of new engagement on this front since last quarter?

Yes. Thanks for that question, Bennett. I think you really need to take a step back and think about the work that the government is doing on critical minerals as well as trade policy and take that all into consideration as we think about how we promote a strong and domestic industrial base and in particular, steel making, right? I mean 70% of this deal in the U.S. is made via the EAF. 50% of steel in Europe is made via EAF. You can't produce that steel without electrode. So it's really important that not only are we protecting the steel and the downstream industries for steel, but we also have to think about the supply chains and the base that supports the steel industry, and we really need to see a healthy electrode industry to support that. As we think about what's going on and some of the announcements that you mentioned, we said this on the second quarter call and still stand by it that we're really applauding what the Trump administration is doing on that front and what the Department of War is doing to support the development of critical mineral supply chains, both in the U.S. and with its allies. We've talked about the 93%. So I won't go back down that path. But I think just this trade tit for tat that you're seeing between the U.S. and China around critical minerals really highlights kind of that importance, again, of creating that strategic supply chain. And I think synthetic graphite squarely fits into what the aim of that is. I think as it relates to GrafTech, I think we're uniquely positioned as a 139-year-old industry leader, technical innovator as well as being the only vertically integrated producer of synthetic graphite with Seadrift down in Texas. And we're confident that will play a critical role in supporting the domestic supply chain now and into the future. I think we remain confident that we can be a good strategic partner in this space and we'll continue our advocacy efforts to propose GrafTech's interest now and into the future. As it relates to any further commentary, I just think at this point, it wouldn't be appropriate or useful for me to comment further.

And our last question comes from the line of Jay Spencer with Stifel.

So you mentioned your selling price on average is $4,200 per ton. And you mentioned that the U.S. volumes, I believe you said boosted the average price by $120 per ton. Is that -- is it fair to say that U.S. pricing has improved sequentially from the prior quarter?

I would say -- this is Rory. I would say it's flat to slightly up compared to the prior quarter.

Remember that you typically see U.S. contracts negotiated on an annual basis. So you don't see a lot of price movement within the U.S. on an annual basis.

And as us analysts looking for indicators of pricing, we've looked at China graphite electrode pricing on Bloomberg historically, even though that's not the price you guys actually realized it was -- it provided some information in terms of directionality. But given the increase in tariffs for active anode material and given your focus on the U.S. Is that kind of that Bloomberg metric no longer useful? Or how should we think about that?

Yes. So that Bloomberg price, we've seen quite a bit of volatility over the last 12 to 18 months. I think it serves at least as a directional indicator of what you're seeing in the market, maybe not at those exact levels, just given kind of the delta between the domestic market, the export market and what that looks like. But China pricing -- the Chinese export pricing is always going to be a proxy for what the rest of world pricing is. So those regions that are less focused on quality and are focused on buying the cheapest electrodes available to the market. So that Chinese pricing is going to see -- or have a bigger impact in the Middle East, Turkey, Africa, South America, in particular. As it relates to the U.S. and the EU, it doesn't necessarily influence those prices to the same extent, just given the fact that you do already have trade protections in place against Chinese electrodes to some extent in the U.S. and certainly to a bigger extent in the EU. So it certainly is an influence, but it isn't the ultimate driver in those 2 end markets. What becomes the challenge is the amount of volume that gets put into the rest of world by the Chinese, exporting 300,000-plus tons of electrodes into the rest of world markets puts a lot of pressure on the western suppliers to focus their energies in the markets that have better pricing. And it just has this knock-on effect as you think about globally. So that's why the commentary on the excess capacity and exporting their excess capacity becomes so relevant.

That concludes the question-and-answer session. I would like to turn the call back over to our CEO, Tim Flanagan for closing remarks.

Thank you, Desiree. I'd like to thank everyone on this call for your interest in GrafTech, we look forward to speaking with you next quarter. Have a great day.

Ladies and gentlemen, that concludes today's call. Thank you all for joining, and you may now disconnect.