Good morning, and welcome to GrafTech International's third quarter 2026 earnings call. Thank you for joining us.

Joining me on the call are Tim Flanagan, Chief Executive Officer, and Rory O'Donnell, Chief Financial Officer. Tim will begin with opening comments on our key strategic initiatives, Rory will then provide color on our quarterly results, outlook, and other financial matters.

After closing comments by Tim, we will then open up the call to questions. Turning to our next slide.

As a reminder, our comments today 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.

Morning, everyone, and thank you for joining us today. The third quarter marked another important period for GrafTech as we continue to advance the commercial, operational, and strategic initiatives designed to improve our long-term profitability and strengthen our competitive position.

We are particularly encouraged by the progress we are making on the pricing front, as higher-priced customer commitments reinforce our confidence that we've reached an inflection point in our realized pricing. During the quarter, we also announced significant step in our strategy to improve the efficiency and competitiveness of our manufacturing footprint through the planned closure of our Monterrey, Mexico facility.

These actions, together with our ongoing efforts to improve our cost structure, advocate for fair trade, and capitalize on emerging market opportunities, reflect our commitment to taking decisive steps to strengthen GrafTech's financial performance. We also remain confident in the longer-term fundamentals of our end markets, supported by improving steel industry conditions across many of our key regions, the continued transition towards electric arc furnace steelmaking, and the growing strategic importance of synthetic graphite.

This morning, I'd like to begin with an update on our strategic priorities, followed by our perspectives on the steel market and broader industry environment. I'll then discuss safety, before turning the call over to Rory for a review of our financial results.

On the commercial front, our disciplined commercial approach is beginning to produce tangible results. During the third quarter and early in the fourth quarter, we continue to secure customer commitments at higher price levels than those secured in earlier periods this year, reinforcing our expectation for meaningful improvement in realized pricing in 2027.

Restoring graphite electrode pricing to more sustainable levels remains essential to supporting continued investment in high-quality manufacturing capacity and ensuring reliable supply for our customers. As we've seen in prior industry cycles, changes in the balance between supply and demand can result in relatively rapid and significant movements in graphite electrode pricing.

While the timing and magnitude of any recovery will depend on market conditions, we believe the combination of improving commercial momentum and actions to better address industry overcapacity create the potential for meaningful price recovery. To put our recent pricing progress in perspective, market pricing continued to decline early in 2026 before beginning to recover during the second quarter, on the heels of the price increase we announced in March.

Since then, we have seen sustained improvement in the prices reflected in new customer commitments. However, because of our realized pricing reported to date in 2026 reflects commitments that were primarily entered into in prior periods, those improvements have not yet translated into our quarterly results.

Our weighted average realized price was approximately $3,900 per metric ton in the third quarter, essentially flat with the second quarter. However, based on our current order book and the timing of shipments against these higher-priced commitments, we expect a mid-single-digit percentage increase in realized pricing in the fourth quarter.

Looking ahead to 2027, we are seeing positive results in securing customer commitments at significantly higher prices than those reflected in our 2026 business. While a substantial portion of our anticipated 2027 volume remains to be committed, as is typical for this point in the year, these initial results reinforce our confidence in the pricing momentum we are building.

Importantly, our objective is not simply to achieve near-term improvement in pricing, but to establish a more sustainable pricing environment. We believe our efforts to better align production capacity with underlying demand, together with the value customers place on reliable, high-quality supply, provide important support for that objective.

We remain focused on securing commitments that appropriately reflect the value of our differentiated products, technical capabilities, and reliable supply, while maintaining discipline in how we allocate our available production capacity. We look forward to providing a more comprehensive update on our 2027 commercial position when we report our fourth quarter results early next year.

Beyond our own commercial progress, we are also seeing positive industry developments. In China, graphite electrode prices have increased throughout the year, supported in part by higher raw material costs.

At the same time, Chinese graphite electrode exports have declined approximately 10% year over year. Taken together, we view these developments as further indications that the prolonged period of low industry pricing is beginning to change.

We are also seeing strengthening conditions in the petroleum needle coke market. Needle coke prices have steadily increased throughout the year, reflecting a combination of higher raw material costs and evolving supply and demand conditions.

At the same time, interest in our own needle coke production capabilities is growing amongst potential customers serving various end markets. Historically, needle coke and graphite electrode pricing have been closely correlated, with an average spread between the two of approximately $4,000 per metric ton over the past 20 years on an inflation-adjusted basis.

Therefore, we believe the strengthening needle coke market provides another catalyst for higher electrode pricing, while our vertical integration positions GrafTech favorably as these market dynamics evolve. Second, with respect to our manufacturing footprint.

In the third quarter, we announced the planned closure of our graphite electrode manufacturing facility in Monterrey, Mexico. This represents an important step in our efforts to optimize our manufacturing network, improve operational efficiency, and better align production capacity with market demand.

Over the past several years, the graphite electrode industry has faced persistent structural overcapacity, reflecting significant capacity additions in certain markets that have outpaced underlying demand growth. These conditions have contributed to a prolonged period of depressed pricing, and have made it increasingly difficult to justify maintaining excess manufacturing capacity.

We have taken meaningful actions over the past several years to improve our cost structure and operational efficiency. However, given the continued imbalance between industry supply and demand, we determined that further action was necessary.

Following the phased wind-down of Monterrey, customer requirements currently served by that facility will transition to our manufacturing operations in Calais, France and Pamplona, Spain. The transition of connecting pin production capacity to Pamplona is also in process and on track.

Upon the completion of this transition, early in the second quarter of 2027, our annual graphite electrode production capacity is expected to be approximately 127,000 metric tons. Importantly, we are confident this consolidation will enable us to serve our customers more efficiently through a more competitive manufacturing footprint, while preserving the differentiated product capabilities and technical expertise that are central to GrafTech's value proposition.

We expect the initiative to strengthen our cost structure, improve operating efficiency, and reduce future capital requirements. We are managing the transition carefully, with a focus on safety, maintaining supply continuity, and meeting our customer commitments.

I also want to reiterate our support for the employees impacted by this decision. The Monterrey team has made important contributions to GrafTech over many years, and we're committed to treating our colleagues with respect and supporting them throughout the transition.

Taken together with our ongoing manufacturing productivity and cost reduction initiatives, this action represents another meaningful step towards establishing a more sustainable foundation for long-term profitability. Following the wind-down of operations and permanent removal of graphite electrode production capabilities at Monterrey, we intend to pursue the sale of the property, and have already begun preliminary activities in preparation for a potential transaction.

Any proceeds from a future sale would provide additional opportunity to support our liquidity position and reduce our outstanding debt, consistent with the requirements of our lenders. Third, with respect to trade policy.

We continue to advocate for fair trade and more balanced competitive conditions across the graphite electrode industry, including through our support of trade proceedings in key commercial jurisdictions. As we discussed last quarter, the US Department of Commerce has been investigating imports of large diameter graphite electrodes from China and India.

Since our last call, Commerce has issued its preliminary anti-dumping determinations. While we are disappointed with the preliminary outcome as related to India, it's important to emphasize that the investigation is not yet complete.

The information submitted by the Indian respondents remains subject to verification by Commerce, and the final determination is expected during the first quarter of 2027. We will remain actively engaged throughout the remainder of this process, and continue to support efforts to address unfair trade practices that undermine the competitiveness of domestic graphite electrode manufacturing.

More broadly, we believe appropriate trade enforcement is an important component of establishing a healthier and more sustainable competitive environment, particularly as governments increasingly recognize the strategic importance of maintaining domestic and regional industrial capabilities. Finally, with respect to emerging opportunities.

We continue to believe that the growing strategic importance of synthetic graphite presents attractive longer-term opportunities for GrafTech. As we've discussed previously, graphite electrodes are essential to electric arc furnace steelmaking, which we expect to benefit from the continued transition towards more sustainable methods of steel production.

At the same time, demand for high-quality synthetic graphite and petroleum needle coke is expanding into applications beyond traditional steelmaking, including battery materials, energy storage, and certain defense and industrial applications. These trends are reinforcing the importance of reliable, high-quality supply chains, particularly in North America and Europe.

GrafTech's vertical integration into petroleum needle coke, extensive manufacturing capabilities, and expertise in graphite and carbon science provide a differentiated foundation from which to pursue these opportunities. An example of our progress in this area, which we're quite excited about, is the collaboration with Antora Energy that we announced in September.

Antora develops thermal batteries designed to provide reliable energy supply for industrial applications, such as AI data centers. Our collaboration is focused on leveraging our manufacturing capabilities at our St.

Marys, Pennsylvania facility to support this technology. Although still in its early stages, this represents tangible progress in our efforts to leverage existing assets and technical capabilities to develop new revenue opportunities.

We continue to engage with prospective customers and strategic partners and policymakers to evaluate opportunities that leverage our existing capabilities and infrastructure. While these opportunities remain at various stages of development, we believe they offer attractive potential to diversify our business over time and create additional value from our assets.

In summary, we are making progress on several important fronts. Pricing momentum is building, and we are taking decisive steps to improve our manufacturing footprint and cost structure, and we continue to position GrafTech to benefit from longer-term growth opportunities.

We believe these actions will strengthen our competitive position and enhance our ability to generate improved earnings and cash flow as industry conditions recover. With that, let me turn to the broader steel market environment.

Turning to slide five. Let me spend a few minutes discussing the broader steel market, as steel industry fundamentals remain the primary driver of long-term graphite electrode demand.

Overall, we continue to see improving trends across several of our key regions, supporting our expectation for modest growth in graphite electrode demand during 2026. Through the first two months of the third quarter, global steel production, excluding China, totaled approximately 142 million metric tons, an increase of approximately 2% compared to the corresponding period last year.

In the United States, steel production continues to benefit from favorable trade policies and resilient domestic demand, with steel capacity utilization reaching 80% for the second consecutive quarter. While the pace of improvement varies by region, we're also encouraged by recent policy developments in Europe that we believe will support a more favorable environment for regional steel producers over time.

Taken together, these trends reinforce our view that the steel industry fundamentals outside of China are gradually improving, providing a constructive foundation for graphite electrode demand. Turning to slide six.

Beyond the improving conditions we're seeing today, several potential catalysts could support additional growth in steel demand over the coming years. These include infrastructure investment, higher defense spending, investments associated with the energy transition, and growing demand related to artificial intelligence and data center infrastructure.

We also see opportunities for additional demand growth as construction activity recovers, investment in steel-intensive manufacturing increases, and geopolitical tensions ease. While the timing and magnitude of these individual catalysts will vary, we believe their combined impact provides a favorable backdrop for steel demand growth over the medium term.

Importantly, this perspective is supported by the World Steel Association's latest Short Range Outlook published earlier this month. The World Steel Association is projecting finished steel demand growth outside of China of approximately 1.5% in 2026, accelerating to 4% in 2027.

We view this anticipated acceleration as an encouraging indicator of improving industry fundamentals, with positive implications for graphite electrode demand. Specifically in Europe, which remains one of our most important commercial regions, we see important developments aimed at strengthening the competitiveness of regional steel production.

As we discussed last quarter, the implementation of the European Union's Carbon Border Adjustment Mechanism, together with increased trade protections for steel, has the potential to improve the competitive position of European steelmakers. More broadly, we believe these catalysts will drive increased regional steel production over time and support our view that graphite electrode demand outside of China will increase at a compound annual growth rate of approximately 3% in the coming years.

While the pace of improvement will depend on broader economic and market conditions, we believe that these demand drivers, combined with other strategic actions we are taking to improve our commercial performance and cost structure, position GrafTech to benefit as industry conditions strengthen. Before turning the call over to Rory, I'd like to briefly discuss an area that will always remain our highest priority, which is safety.

I've always believed that no business objective is ever more important than ensuring our people return home safely at the end of every shift, and I am proud of the continued focus our employees have demonstrated across our global operations. Through the first nine months of 2026, our total recordable incident rate was 0.47.

While this is above our full year 2025 performance, it remains substantially below the levels we experienced several years ago, reflecting the meaningful progress we have made in strengthening our safety culture. We recognize that maintaining a strong safety performance requires constant attention and a commitment to continuous improvement.

Safety must remain embedded in every aspect of how we operate, rather simply than a metric being reported each quarter. On behalf of our leadership team, I'd like to thank all of our employees for their dedication to operating safely while delivering for our customers every day.

Their commitment is the foundation of everything we accomplish as a team. With that, I'll turn the call over to Rory to review our third quarter results and our outlook in greater detail.

Thank you, Tim, and good morning, everyone. I'll begin with our third quarter operating and financial performance, before discussing our liquidity position and financial outlook.

Our third quarter results reflected continued execution against our operating priorities, including disciplined production management and ongoing cost improvements, while financial performance continued to reflect lower realized graphite electrode pricing associated with customer commitments established before our recent pricing actions. Starting with our operations.

Production volume was approximately 27,000 metric tons during the quarter, an increase of 2% compared to the prior-year quarter, but a sequential decline of 19% from the second quarter of 2026. The sequential decline in production primarily reflected planned summer maintenance shutdowns at our European manufacturing facilities.

Our capacity utilization rate for the quarter was 64%, compared to 63% in the third quarter of last year and 74% in the second quarter of 2026. Through the first nine months of 2026, production volume exceeded sales volume by approximately 2,000 metric tons.

We continue to expect production and sales volumes to be balanced on a full year basis, consistent with our previous outlook. Turning to sales.

We delivered approximately 29,000 metric tons during the quarter, essentially flat compared to the prior-year period and in line with our expectations. Importantly, year-to-date sales volume increased approximately 7% compared to the first nine months of 2025, keeping us on track to achieve our full year expectation for sales volume growth between 5% and 10%.

Net sales for the quarter were $140 million, a decline of approximately 3% compared to the third quarter of last year, primarily reflecting lower weighted average realized graphite electrode pricing. Our weighted average realized price was approximately $3,900 per metric ton, down approximately 7% compared to the prior-year quarter, and has been essentially flat through the first three quarters of 2026.

As Tim discussed, our reported pricing continues to reflect customer commitments established before the more recent improvements in market pricing. We expect the benefit of these higher price commitments to begin flowing through our reported results in the fourth quarter, with a significant increase in realized pricings anticipated in 2027 compared to 2026.

To put the financial opportunity in perspective, each $100 improvement in our weighted average realized price would equate to approximately $12 million of incremental annual cash flow, thereby further supporting our liquidity position. Combined with the actions we are taking to optimize our manufacturing footprint and improve our cost structure, we believe this pricing momentum positions us to deliver stronger financial performance going forward.

Turning to slide nine. We continue to make progress on our cost improvement initiatives, while managing the impact of ongoing inflationary pressures across several key input categories.

During the third quarter, cash cost of goods sold per metric ton declined approximately 4% compared to the prior-year quarter. While this metric can fluctuate from quarter to quarter due to production schedules, inventory timing, and the recognition of manufacturing costs, our underlying cost structure remains materially improved from the levels we experienced several years ago.

Our teams remain focused on identifying and executing opportunities to improve manufacturing productivity, enhance operating discipline, optimize procurement effectiveness, and improve energy efficiency. To highlight two key areas of focus.

First, with respect to decant oil, a key raw material in our needle coke operations, we continue to manage cost pressures through supplier diversification and enhancements in our blending capabilities. In addition, sales of oil-related byproducts from our needle coke manufacturing process provide a natural hedge that partially offsets increases in decant oil costs.

Further, our domestic feedstock sourcing and established supplier relationships provide an advantage in managing raw material availability, particularly given the ongoing supply chain disruptions and uncertainty affecting producers in Asia. Second, in Europe, fixed-price energy contracts covering a significant portion of our 2026 requirements have helped insulate us from recent market volatility.

As we look to 2027, we anticipate higher energy costs as portions of that contractual coverage reset, and we are incorporating those expectations into our operating plans while continuing to pursue energy efficiency improvements. Despite these external headwinds, we continue to expect a low-single-digit percentage decline in cash cost of goods sold per metric ton for the full year of 2026 compared to 2025.

Looking beyond 2026, the planned consolidation of our manufacturing footprint through the closure of our highest cost facility, Monterrey, is expected to provide meaningful financial benefits. As previously announced, we anticipate annual cash cost savings of approximately $20 to $25 million, with the full benefit expected in 2028, as well as a reduction in annual capital expenditure requirements of approximately $5 million beginning in 2027.

We also expect a one-time release of approximately $20 to $25 million of working capital, with the majority anticipated to occur in 2028. These benefits will be partially offset by approximately $20 to $25 million of one-time cash costs associated with the closure, the majority of which is expected to be incurred by the end of 2027.

As we have emphasized previously, our objective is not simply to reduce costs in the near term, but to establish a more efficient and competitive manufacturing network that can deliver greater operating leverage as market conditions improve. Importantly, we remain committed to achieving these improvements while maintaining the product quality, reliability, and safety standards that our customers and employees expect.

With that, let me turn to our third quarter earnings and cash flow performance. Turning to slide 10.

We reported a net loss of $47 million, or $1.76 per share, compared to a net loss of $28 million, or $1.10 per share, in the prior-year quarter. Included in our third quarter results were approximately $14 million of restructuring and other exit charges associated with the planned closure of our Monterrey manufacturing facility, the majority of which were non-cash.

Adjusted EBITDA was $9 million during the quarter, compared to $13 million in the prior-year period, with the decline primarily reflecting lower weighted average realized graphite electrode pricing, partially offset by lower cash cost of goods sold per metric ton. Turning to cash flow.

Net cash used in operating activities was $8 million during the third quarter, while adjusted free cash flow was negative $16 million. This represented a significant improvement from the second quarter, when net cash used in operating activities was $69 million and adjusted free cash flow was negative $75 million.

Our third quarter cash flow reflected an increase in inventory levels that was consistent with our expectations. We continue to anticipate a reduction in working capital, including inventory, during the fourth quarter.

As we have discussed previously, our cash requirements are influenced by the seasonal nature of our working capital needs, as well as the timing of our semiannual interest payments on our second lien notes, which occurs in the second and fourth quarters. We continue to expect the second quarter to represent our highest quarterly cash requirement for 2026, with cash usage during the second half of the year significantly lower than during the first half.

For the full year, we continue to expect a modest increase in working capital, and we are maintaining our expectation for approximately $35 million of capital expenditures. Turning to the next slide, let me review our liquidity position and debt maturity profile.

We remain focused on preserving liquidity and managing our balance sheet prudently, as we execute on our strategic initiatives. We ended the third quarter with approximately $242 million of total liquidity, consisting of $134 million of cash and approximately $108 million of available borrowing capacity under our revolving credit facility.

Importantly, we have substantially no debt maturities until December of 2029, providing us with the time to execute our operational and commercial initiatives and benefit from improving market conditions. Taken together, our liquidity position and debt maturity profile provide financial flexibility as we manage through the current industry environment and implement the actions necessary to strengthen our long-term profitability.

As we look ahead, we remain focused on preserving liquidity, managing capital expenditures and working capital carefully, and pursuing opportunities to strengthen our balance sheet over time. In my closing remarks, I would like to thank our employees around the world for their continued dedication and hard work.

Their commitment is essential as we execute our strategic priorities and position GrafTech for improved financial performance. With that, I'll turn the call back to Tim for his closing remarks.

Thank you, Rory. Before we open the call for questions, I'd like to close with a few thoughts on why we remain confident in GrafTech's future.

First, we are making meaningful progress on the priorities within our control. Our commercial initiatives are gaining traction.

We are securing customer commitments at significantly higher prices, and we are taking decisive actions to improve our manufacturing footprint and cost structure. While we recognize that our financial performance does not yet reflect the full benefit of these actions, we believe the progress we are making today is establishing a stronger foundation for improved profitability and cash flow.

Second, we remain encouraged by the longer-term fundamentals of our industry. The continued transition toward electric arc furnace steelmaking, together with improving steel industry conditions outside of China, supports our expectation for growth in graphite electrode demand over time.

Third, GrafTech possesses a set of differentiated capabilities that we believe will be increasingly valuable as market conditions evolve. These include our global manufacturing network, substantial vertical integration into petroleum needle coke, advanced manufacturing technology, and our ability to provide high-quality products and technical solutions to our customers around the world.

We are also leveraging these capabilities to pursue opportunities in adjacent markets, providing additional avenues for long-term growth. Finally, we recognize the importance of strengthening our financial position.

We remain committed to disciplined capital allocation, preserving liquidity, and ultimately reducing leverage as our operating performance improves. We recognize that there is more work ahead, but believe the combination of the pricing improvements we're securing, a more efficient cost structure, and our differentiated competitive position creates a compelling opportunity for GrafTech.

Our focus remains on executing our strategy and delivering sustainable value for our shareholders. With that, we'd be happy to take your questions.

Maybe we go to the next one

and then

come back to you. Good morning.

Oh, there you go.

Hey, Bennett.

Can you guys hear me?

We can hear you now. Okay.

Sorry about that. Thanks for taking my questions.

I guess, first, it's really encouraging to hear the strong price momentum headed into 2027. First, could you just talk about how the dialogue has been with customers on that front?

Then second, is your expectation that these increases will be margin accretive, given the cost inflation I guess on the EU energy side and maybe lagged decant oil costs?

Absolutely. Thanks for the question.

Maybe let's talk a little bit about kind of the evolution over the course of this year from a pricing perspective. As we entered '26, we saw declining spot prices that were contracting in the first quarter, which led to the initial price increase that we announced at the end of the first quarter.

We gave some guidance or at least some directional indications in the second quarter call that if you extrapolated what we're seeing in the marketplace as a result of that over the full volume, it would be roughly a 15% uplift. That's what's starting to take hold and will drive the mid-single-digit increase that we mentioned heading into the fourth quarter.

Then early September, announced another price increase of 30%. That really is where the negotiations start with every customer, and each customer is a bespoke or unique negotiation.

That's the starting point. I think at this point right now, we're really pleased with the progress we're making in those discussions.

We still have quite a bit of volume yet to book, but I think we're right on track where we've been in prior years at this point in time, now four to six weeks into the heart of the negotiation season. I'd expect as we work through the end of the year, we would end the year and get into the first quarter, the call in February for the fourth quarter with roughly 60% to 65% of our order book confirmed.

Making good progress. I think if I add some color to the customer conversations, I think they understand and appreciate that electrode pricing has been on a downward slope for quite some time and that necessarily isn't sustainable in the long run.

I think there's absolutely a recognition of the importance of the electrode industry to the health of the steel industry. I think when you start to talk about utilization rates at 80% plus in the United States, there certainly is a need to have a stable supply base.

I think a lot of the conversation is oriented around that. I think there's also a recognition, too, that to your second part of your question, that there are rising costs and there are some headwinds globally on the needle coke front, in particular the raw material input that we use, decant oil, as well as energy pricing.

I'm confident in saying at this point in time that the price increase and the momentum we're building and where we land in next year will be margin accretive, will more than offset any sort of cost increases that we'll experience. As I think we've done a pretty good job over the last couple years in reducing our costs.

I think we can do quite a bit to combat the inflationary pressures we're seeing.

No, that's great color, I appreciate it. My second question, I want to ask about the rationale behind why Monterrey was specifically chosen.

I think the location makes it appear as if it's counterintuitive, but presumably there were some aspects related to efficiencies and prior investments at other facilities, maybe if you could just help unpack that.

Yeah. No, that's a good question.

I think, if you take a step back, first and foremost, and I think we've alluded to this in a number of calls previously, with oversupplied market conditions, we felt that we needed to evaluate what our portfolio looked like. I think everyone on the call can appreciate that running industrial assets at 60% utilization is not a recipe for long-term success.

Really our first objective was to bring that oversupply back into balance to the extent that we could. We've looked at all of our facilities and really went through an evaluation process of saying, how do we continue to serve our customers, and by serving our customers, maintaining the product mix that we have today, our capabilities around supersized electrodes to standard sizes, as well as some of the more unique products that we offer to the market that differentiate us, ALX, extra long lengths, the low oxidation, items like that.

Secondarily, we wanted obviously to improve our cost profile, which Rory spoke to in terms of bringing down our fixed costs. We are able to reduce the overall cost profile on a variable cost basis for a number of reasons.

Monterrey is the highest-cost facility that we had in our portfolio, partially driven by the fact it's also the smallest set of assets in our portfolio. Then lastly, it's how we manage the risk of transition, right?

How we can ensure that we can do this seamlessly and not disrupt ultimately our customer's business. I think one thing that's importantly, you raise the point of the proximity to the US market, and that we only serve the US market partially out of Monterrey.

We've historically brought in quite a bit of material from our European facilities. From our perspective, this isn't really a change in the way we've otherwise had to operate.

St. Marys gives us a lot of flexibility to stockpile inventory, allow us to manage deliveries and shipments to customers.

It's been a pretty efficient supply chain for us over time. At the end of the day, we view it as it's the same needle coke going through the same production process under the same quality standards, with the same expectations of product performance.

It doesn't really affect how we think we'll deliver to our customers at the end of the day.

Hey, Bennett, just couple more things to add on the cost front. Don't overlook the efforts that we've made in the past few years around investment in equipment and process innovation around our needle coke production facility.

I think we've got a proven track record that we're able to battle changes in underlying crude indices and other commodity costs with our capabilities around blending. I mentioned it in my prepared remarks.

With those investments we've been making, it's possible for us to continue to improve our premium needle coke quality with a diversified set of oils. We've got many refineries that supply us, they're not all the same quality, but we've got the science behind the blending and the ability to cushion some of the blow of some of the volatile markets.

Please keep that in mind. On the energy front, remember we have a pretty robust hedging strategy in Europe.

Some hedging contracts are up to two years, we're going to enjoy some protection against some of the volatility going into 2027 in some of our operations in Europe. It's kudos to the team, the management team, around identifying these risks and properly mitigating them, whether it's through process innovation, supplier relations, equipment investment, or contractual commitments.

Just want to add that to Tim's cost comments.

Oh, that's great, great color and much appreciated. Maybe just sticking with that thread, if I can squeeze in one last one, is with the Antora deal, is there any opportunity here to help absorb stranded fixed costs at St.

Marys?

Of course. That's one of the benefits that we see.

We're not going to guide to individual asset costs or any of the terms of the agreement, we're still working through it with our partner, but we're pleased where it's going. That, of course, is what Tim was mentioning around prudent use of our idle assets.

That's exactly one of the objectives. I think I'll leave it at that, but you can assume an offset.

All right. Thank you very much.

Thanks, Bennett.

Great, good morning. Thanks for taking my questions.

I think you mentioned kind of turning the corner on some pricing initiatives, maybe you can just elaborate on what you're seeing there. Maybe if you could link that to your outlook on needle coke as well.

It sounds like you've done some work there, but yeah, is there more of an outlook on what you see there, especially given the recent oil price inflation? Thanks.

Arun, thanks. On the pricing front, again, I think good progress is being made by the team across the board.

I think we'll start to see the realization of the initial price increase that we announced back in March in Q4. That will have a higher ASP reported out in the fourth quarter.

Then you'll see a step change that will be meaningfully higher as we head into 2027, as we continue to work through the negotiations. Very pleased thus far with the team's effort and all the work that's been done throughout the year to get us here.

I don't know if there's much more I can say at this point on the pricing front. With respect to needle coke, I think needle coke has been, similar to electrode prices, pretty stagnant for a number of years.

We probably entered the year somewhere in the $1,000 to $1,200 range, depending on grade. We've seen that steadily increase over the course of the year.

Really that's a factor of two things. One, obviously higher oil prices are going to drive the byproducts for oil, so that's certainly driving up the price of needle coke to some extent.

Also supply and demand. I think we're seeing greater demand in the market across a couple end markets in end users, which certainly helps drive up the price of needle coke.

If I had to say where I think the market is today, we're probably in that $1,700 to $2,000 a ton range, again, which I think provides support for higher electrode prices going into 2027. I probably would expect that number to continue to creep up as we head into Q1, Q2 of next year.

Again, it's been a little while since we've had this conversation, but again, when you start to see needle coke prices in that range, Seadrift really becomes a cost benefit to us and a strategic asset, beyond the benefits we get from having surety of supply and the ability to control the quality of the product we put into our electrodes. We're really pleased with how that market's evolving as well.

Thanks for that. I guess wanted to get your thoughts on supply-demand for electrodes globally.

Congrats on your own decisive actions here to close Monterrey, but you noted the 60% utilization, I imagine the industry is also not running full, and maybe above that at 60%, but where do you think industry utilization rates are, and do you expect other actions? I know you yourself may not be able to take anything else, but I guess maybe just get your thoughts on that.

Then as a related question, now that you will be exiting some electrode finishing capacity, conversion capacity, will you still be able to potentially use some of your needle coke and divert it to the EV side, the battery materials market, or is that unlikely? Maybe you can offer your thoughts on both industry supply-demand and then potential forays into the EV industry.

Thanks.

Thanks, Arun. Try to capture both of those.

Just to clarify, on a year-to-date basis, we're at about 68% utilization, a little better than the 60% that I threw out there before, but just as an example. I think if you look across the industry right now, if I had to take an estimate of where I think it's at collectively, we're probably sitting at about 65% globally outside of China.

If you take the 51,000 tons of capacity reduction, that would put you probably closer to 70% or just over 70%. Certainly a meaningful move in terms of balancing out supply and demand, but I think there's still opportunity for that to tighten up.

Some of it will happen organically as electrode demand continues to grow at, call it 3% a year over the next five years or so, as we project out. Also, I think there's still opportunity for some supply reduction in the market.

Which plants and which competitors in that, I think we've done our part. I won't speculate as to what it is, but I think at the end of the day, this is a cost game, and fixed-cost leverage game in many respects.

I think the bigger the plant, the more cost-competitive they tend to be. With respect to Seadrift and how we view Seadrift as an asset, certainly by reducing our electrode capacity, that gives us a little bit more capacity, our excess capacity out of Seadrift, and certainly allows us to continue to explore how we partner and supply needle coke into I'll say broadly other synthetic graphite applications, whether that's for EVs, energy storage, industrial defense applications, whatever.

We continue to work in the background, as we have been saying for the last couple years. Antora is the first big example of kind of all of this work by our development and technical teams to come to market and allow us to use some stranded assets.

We have a number of other initiatives and activities going on that will allow us to use the needle coke at Seadrift and pretty excited about where that'll land longer term.

Thanks.

Thanks, Arun.

Good morning. Thank you for taking my questions.

Maybe just some housekeeping items. The cost to achieve the Monterrey closure, the $20-$25 million, what is cash versus non-cash, and how do you split that up between COGS and SG&A?

That is a cash cost, $20 to $25 million. I guess I would split it predominantly as cost of goods sold.

The primary categories of that cost are general closure costs is about half, and people costs is the other half. You could probably think about that mostly as COGS, but we'll be isolating that to report it separately for you as it go forward.

Maybe the $20-$25 million of cost savings. I guess how would you split the cost savings between COGS and SG&A?

Oh, I

think I misspoke over here, so.

That cost savings will be primarily cost of goods sold.

We're

lowering our overall Okay. There's

no long-term liability, clean-up costs that are kind of associated with closing the Monterrey? That's included in the first 20.

There's

a lot of $20 to $25 millions floating around. That first $20 to $25 million was the cash costs expected from the closure, which would incorporate all the site closure costs and other decision-based costs, and the $20-$25 million of cost savings going forward would be COGS savings.

Okay?

If that clarifies it?

Yes, it does. You kind of mentioned that you thought, realized prices would be up mid-single digits, quarter-on-quarter in the fourth quarter.

I g- guess if we were just to look at those open contracts where you're able to actually enable cost increases or price increases, what was the percent change on those on a on those volumes on a quarter, quarter-versus-quarter basis or expected change?

I'll go back to kind of the analysis or the indicators that we shared previously. Because when the first price increase we announced was a range of $600 to $1,200, it wasn't ratable across each region, and again, negotiated on a customer-by-customer basis.

If you take what we achieved in those on a regional basis and apply our existing mix, it was about 15% for the new contracts that we had. Again, just to remind you, or the new commitments that we made during 2026 after the price increase announcement.

Just again to remind you that when we made the price increase announcement, about 80% of our volume was already committed. It's a relatively small subset of customer commitments that were at that higher price point.

Okay. That is essentially what you're saying, that's flowing through into the fourth quarter and that's why we're getting to the mid-single digits?

Yeah. If you think about the way, Q1 would have been all negotiated in '25.

Q2 would have been almost entirely negotiated in '25, maybe some small volumes in '26, but probably before the price increase. Q3 and Q4, that percentage of when it was contracted, pre- or post-price increase, tends to go up.

The fourth quarter is going to have the biggest portion and that's why we're seeing the price increase now trickle through our results. Then

given your recent price increase, I think of was it 30% in September-ish timeframe, that's going to then flow through 1Q combined with the commitments that you typically get from the North America markets, that will all essentially kind of flow through to the higher price increases and starting in 2027. Am I kind of thinking about the various parts correctly?

Yeah. That'll be a step change as we get into '27.

All of the '27 volume is being negotiated post this new price increase announcement. You'll see a step change as we get into Q1 deliveries.

Again, typically it's more of that 60% to 65% that we have committed in the start of the new year, is going to be heavier weighted towards North American or US customers, just way those markets tend to contract versus the rest. There is a lot of European and other region commitment in there as well.

Maybe just touching on, in the US the anti-dumping and countervailing duties that were, at least the preliminary was provided since your last call. That seems like especially on India was kind of lower versus your expectations, maybe if those are reaffirmed, how do you expect US graphite electrode import volumes to be impacted and maybe the impact on pricing within the US?

A little disappointed in the outcome, but again, I don't think the previously communicated numbers were our expectations. That's what the filed cases were and the preliminary assessment coming out of the ITC.

Again, as we made in our prepared remarks, the investigation's not complete. That the information will be subject to verification, as it always is, as Commerce works through its process.

I think we're confident that Commerce will do a complete and thorough investigation before they announce their final ruling in Q1 of next year. In terms of market, I think certainly we saw the Indian competitors have, call it 10% to 15% of the US market a few years ago.

With all of the turmoil and trade talk over the last year or year and a half, I think that maybe is pulled back some. How that plays out going forward, prices are still going up absent the announced increase or tariff levels as high as what the preliminary rulings would have otherwise suggested.

I think we like our position both in the US and Europe globally, and our market position. Again, I think it all comes down to value proposition for those customers that value something other than just the absolute lowest price.

Then my last question, you said earlier that pet needle coke prices are being driven by graphite electrode demand, but then also other markets. Can you just describe what's going on in those other markets, and maybe kind of any other aspects of supply and demand perspective on pet needle coke?

Yeah. I think there's a few things, right?

Obviously, I think all of the disruption in the oil markets to date in terms of oil coming out of the Middle East and getting to needle coke producers globally certainly will have an impact, as well as as you start to think about the demand and the impact that the diesel markets are having, as the refineries produce more diesel, they're producing less decant oil, as decant oil means less needle coke in the market. All of those things can weigh on kind of the supply and demand balance from a price pushing up, but also graphite electrode demand pulling needle coke prices up as well.

It's kind of a push and pull on that front.

Okay. That makes sense.

That's all for me. Thank you.

Thanks, Abe.

Thank you, Kenneth. I'd like to thank everyone on this call for joining us this morning.

We look forward to speaking with you again next quarter. Have a great day.