What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2025-02-14 compared with 2024-02-14 · 39 added, 40 removed, 200 unchanged (28% of the section changed)

1 unchanged sentence

We believe that we have a competitive portfolio of low-cost ultra-high power (“UHP”) graphite electrode manufacturing facilities, with some of the highest capacity facilities in the world.

We have graphite electrode manufacturing facilities in Calais, France, Pamplona, Spain, Monterrey, Mexico and St.

Marys, Pennsylvania.

We have graphite electrode manufacturing facilities in Calais, France;

Pamplona, Spain;

Monterrey, Mexico and St.

Marys, Pennsylvania (idled in 2024).

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.

6 unchanged sentences

On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment.

This includes an indefinite suspension of production activities at our St.

This included an indefinite suspension of production activities at our St.

Marys facility, with the exception of graphite electrode and pin machining.

We are also indefinitely idling certain assets within our remaining graphite electrode manufacturing footprint.

As a result of these initiatives, beginning in 2024, our stated production capacity will be approximately 178 thousand MT 1 .

We also indefinitely idled certain assets within our remaining graphite electrode manufacturing footprint.

As a result of these initiatives, our stated production capacity was reduced from approximately 202 thousand MT in 2023 to approximately 178 thousand MT 1 in 2024.

Our principal executive offices are located at 982 Keynote Circle, Brooklyn Heights, Ohio 44131 and our telephone number is (216) 676‑2000.

12 unchanged sentences

We manufacture graphite electrodes ranging in size up to 31.5 inches (800 millimeters) in diameter, over 11 feet (3,400 millimeters) in length, and weighing as much as 5,900 pounds (2.6 MT).

In 2024, we anticipate expanding our product offerings to include the addition of an 800-millimeter super-sized electrode to our portfolio to serve a small but growing segment of the UHP electrode market.

In 2024, we expanded our product offerings to include the addition of the 800-millimeter super-sized electrode to our portfolio to serve a small but growing segment of the UHP electrode market.

We also manufacture corresponding sizes of graphite connecting pins, which are used by customers to connect and fasten graphite electrodes together in a column for use in an EAF.

For the past several years, all of our connecting pin production was performed at our Monterrey, Mexico facility.

However, we recently added pin production capabilities at our Pamplona, Spain

Prior to 2023, all of our connecting pin production was performed at our Monterrey, Mexico facility.

However, in 2023, we added pin production capabilities at our Pamplona, Spain facility to provide

1 Production capacity reflects expected maximum production volume during the period through our Calais, Pamplona and Monterrey facilities depending on product mix and expected maintenance outage.

Actual production may vary.

facility to provide alternative sources, if needed, for this critical component.

an alternative source, if needed, for this critical component.

The Company continues to explore opportunities to increase its pin manufacturing capabilities.

The total manufacturing time of a UHP graphite electrode and its associated connecting pin is, on average and except for special requests, approximately six months.

10 unchanged sentences

The industry is fairly consolidated, with the five largest global (excluding China) producers in the industry, GrafTech, Resonac Holdings Corporation, HEG Limited, Tokai Carbon Co., Ltd.

and Graphite India Limited, collectively, representing over 80% of global (excluding China) graphite electrode production capacity.

As of December 31, 2023, our stated production capacity was approximately 202 thousand MT through our Calais, Pamplona and Monterrey facilities and represented approximately one-quarter of the global (excluding China) graphite electrode production capacity.

On February 14, 2024, the Company announced a cost rationalization and footprint optimization plan, in response to persistent softness in the commercial environment.

As a result, beginning in 2024, our stated production capacity will be approximately 178 thousand MT.

and Graphite India Limited, collectively, representing approximately 82% of global (excluding China) graphite electrode production capacity.

As of December 31, 2024, our stated production capacity was approximately 178 thousand MT through our Calais, Pamplona and Monterrey facilities and represented approximately 23% of the global (excluding China) graphite electrode production capacity.

We believe that no new graphite electrode production facilities have been built outside of China for several years.

10 unchanged sentences

EAF steelmaking has historically been the fastest-growing segment of the global steel market.

According to the World Steel Association (“WSA”), global (excluding China) EAF steel production grew at a 2%-3% compound annual growth rate from 2015 to 2022, the most recent year for which WSA has published such figures.

According to data derived from World Steel Association (“WSA”) reporting, global (excluding China) EAF steel production grew at a 2%-3% compound annual growth rate from 2015 to 2023, the most recent year for which WSA has published such figures.

This compares to a 1% compound annual growth rate for overall global (excluding China) steel production during this same period.

2 unchanged sentences

According to the Steel Manufacturers Association (“SMA”), EAF steelmaking produces 75% fewer carbon dioxide emissions compared to BOF steelmaking.

Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and

infinitely) recyclable at the end of its useful life.

In addition to these advantages, EAF steel producers benefit from their flexibility in sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as direct reduced iron and hot briquetted iron, both made directly from iron ore.

Further, SMA notes that the EAF process is a sustainable model for recycling scrap-based raw materials into new steel, which is 100% (and infinitely) recyclable at the end of its useful life.

In addition to these advantages, EAF steel producers benefit from their

flexibility in sourcing iron units, being able to make steel from either scrap or alternative sources of iron, such as direct reduced iron and hot briquetted iron, both made directly from iron ore.

Reflecting these and other competitive advantages, we believe EAF steel production will continue to grow at a faster rate than BOF steel production.

22 unchanged sentences

Petroleum needle coke production capacity outside of China has remained relatively flat for many years due to the capital intensity, technical know-how and long permitting lead times required to build greenfield needle coke production facilities.

Chinese petroleum needle coke production capacity is expected to grow significantly in the coming years, with a primary focus on serving the EV market, as China is currently the largest producer of EV batteries.

Chinese petroleum needle coke production is expected to grow significantly in the coming years, with a primary focus on serving the EV market, as China is currently the largest producer of EV batteries.

Although this may provide sufficient capacity to meet global petroleum needle coke needs for the next several years, as demand from emerging non-Chinese EV battery producers continues to increase, we believe that regional supply-demand imbalances will occur, particularly in North America and Europe, in the coming years.

12 unchanged sentences

Our customers include major steel producers and other ferrous and non-ferrous metal producers in Europe, the Middle East and Africa (collectively, “EMEA”), the Americas, and Asia-Pacific (“APAC”), which sell their products primarily into the automotive, construction, appliance, machinery, equipment and transportation industries.

We sell our products under short-term purchase agreements, multi-year purchase agreements (which includes our take-or-pay agreements with initial term of three-to-five years (“LTAs”)) and spot sales.

We sell our products under short-term purchase agreements, multi-year purchase agreements and spot sales.

Our short-term agreements are either annual, semi-annual or quarterly.

2 unchanged sentences

The price of our short-term agreements is determined through contract negotiations with our customers and is influenced by the then-prevailing price on spot purchase orders as well as the anticipated supply-demand situation at the time of the planned deliveries.

There is a lag between the time we negotiate prices for our short-term agreements and when our electrodes are delivered and recognized in revenue.

There is a lag between the time we negotiate prices for our short-term agreements and when our electrodes are delivered and recognized as revenue.

There is no widely accepted graphite electrode reference price.

1 unchanged sentence

Moreover, as petroleum needle coke represents a significant percentage of the raw material cost of graphite electrodes, graphite electrodes have typically been priced at a spread to petroleum needle coke.

Over the period from 2004 to 2023, the average graphite electrode spread over petroleum needle coke was approximately $3,900 per MT, on an inflation-adjusted basis using constant 2023 dollars.

Over the period from 2005 to 2024, the average graphite electrode spread over petroleum needle coke was approximately $4,000 per MT, on an inflation-adjusted basis using constant 2024 dollars, although recent spreads have been narrower.

In tight demand markets, this spread has increased, resulting in higher graphite electrode prices.

Historically, between 2004 and 2023, our weighted-average realized price of graphite electrodes, excluding volume sold under LTAs, was approximately $6,000 per MT, on an inflation-adjusted basis using constant 2023 dollars.

Historically, between 2005 and 2024, our weighted-average realized price of graphite electrodes, excluding volume sold under our take-or-pay agreements with initial term of three-to-five years (“LTAs”), was approximately $6,000 per MT, on an inflation-adjusted basis using constant 2024 dollars.

Our LTAs were entered into between the end of 2017 and early 2019, which coincided with a period of elevated market prices for graphite electrodes.

As graphite electrodes are an essential consumable in the EAF steel production process, the LTAs provided certainty of supply of reliable, high-quality graphite electrodes in an at-times volatile market.

These LTAs have fixed prices.

These LTAs have fixed prices and volumes.

Within the contract, our customers are contractually bound to purchase the specified volume of product at the price under the contract.

Sales from our LTAs represented 22%, 41% and 68% of our net sales in 2024, 2023 and 2022, respectively.

As our LTAs are nearing the end of their terms, our mix of business has shifted towards short-term purchase agreements and spot purchase orders (“non-LTAs”).

Sales from LTAs represented 18% of our net sales in the fourth quarter of 2024 and we are substantially complete with these agreements.

As the substantial majority of our LTAs have expired, our mix of business has shifted towards short-term purchase agreements and spot purchase orders (“non-LTAs”).

We will continue to offer multi-year agreements, also known as electrode supply agreements, as an important part of our commercialization strategy and value proposition.

3 unchanged sentences

Approximately 90% of our graphite electrodes were purchased by EAF steel producers in 2024.

The remaining portion is primarily used in various other ferrous and non-ferrous melting applications, fused materials, chemical processing, and alloy

The remaining portion is primarily used in various other ferrous and non-ferrous melting applications, fused materials, chemical processing, and alloy metals.

We sell our products in every major geographic region globally.

3 unchanged sentences

Sales and Customer Service

We differentiate and sell the value of our graphite electrodes primarily based on price, product quality and performance, delivery reliability and customer technical service.

We differentiate and sell the value of our graphite electrodes primarily based on product quality and performance, delivery reliability and customer technical service.

We have a large customer technical service organization, with supporting application engineering and scientific groups and approximately 30 engineers and specialists around the world serving in this area.

10 unchanged sentences

We can experience significant variation in our customers’ delivery requirements as their specific needs vary and change throughout the year.

We generally seek to maintain appropriate inventory levels, taking into account these factors as well as the significant differences in manufacturing cycle times for graphite electrode products and our customers’ products.

generally seek to maintain appropriate inventory levels, taking into account these factors as well as the significant differences in manufacturing cycle times for graphite electrode products and our customers’ products.

Finished products are usually stored at our manufacturing facilities.

16 unchanged sentences

Among other things, we seek to protect our proprietary know-how and information by requiring employees, consultants, strategic partners and others who have access to such proprietary information and know-how to enter into confidentiality or restricted use agreements.

We maintain insurance against civil liabilities relating to personal injuries to third parties, for loss of or damage to property, for business interruptions and for certain environmental matters, that provides coverage, subject to the applicable coverage limits, deductibles and retentions, and exclusions, that we believe is appropriate upon terms and conditions and for premiums that we consider fair and reasonable in the circumstances.

We maintain insurance against civil liabilities relating to personal injuries to third parties, for loss of or damage to property, for business interruptions, for directors and officers and for certain environmental matters, that provides coverage, subject to the applicable coverage limits, deductibles and retentions, and exclusions, that we believe is appropriate upon terms and conditions and for premiums that we consider fair and reasonable in the circumstances.

There can be no assurance that we will not incur losses beyond the limits of or outside the coverage of our insurance.

6 unchanged sentences

and foreign environmental protection laws and regulations, and for environmental liabilities, are necessarily imprecise due to numerous uncertainties, including the impact of potential new laws and regulations, the availability and application of new and diverse technologies, the extent of insurance coverage, the potential discovery of contaminated properties, or the identification of new hazardous substance disposal sites at which we may be a potentially responsible party (“PRP”) and, in the case of sites subject to the Comprehensive Environmental Response, Compensation and Liability Act and similar state and foreign laws, the final determination of remedial requirements and the ultimate allocation of costs among the PRPs.

Subject to the inherent imprecision in estimating such future costs, but taking into consideration our experience to date regarding environmental matters of a similar nature and facts currently known, we estimate that our costs and capital expenditures (in each case, before adjustment for inflation) for environmental protection regulatory compliance programs and for remedial response actions will not be material over the next several years.

not be material over the next several years.

Furthermore, we establish accruals for environmental liabilities when it is probable that a liability has been or will be incurred, and the amount of the liability can be reasonably estimated.

We adjust the accrual as

new remedial actions or other commitments are made, as well as when new information becomes available that changes the prior estimates previously made and we believe our existing accruals are reasonable.

We adjust the accrual as new remedial actions or other commitments are made, as well as when new information becomes available that changes the prior estimates previously made and we believe our existing accruals are reasonable.

Human Capital Resources

As of December 31, 2024, we had 1,072 employees (excluding contractors), 629 of which were hourly employees.

A total of 435 employees were in Mexico, 414 were in Europe and the Middle East, 358 were in the United States, 37 were in Brazil and five were in the Asia Pacific region.

As of December 31, 2023, approximately 440 employees, or 35% of our worldwide employees, were covered by collective bargaining or similar agreements that expire, or are subject to renegotiation, at various times through December 31, 2024.

A total of 401 employees were in Mexico, 405 were in Europe, 230 were in the United States, 32 were in Brazil, three were in the Asia Pacific region and one was in the Middle East.

As of December 31, 2024, 647 employees, or approximately 60% of our worldwide employees, were covered by collective bargaining or similar agreements.

We believe that, in general, our relationships with our employees’ unions are good and that we will be able to renew or extend our collective bargaining or similar agreements on reasonable terms as they expire.

16 unchanged sentences

Our global footprint lends itself to organic diversity, and our employee base has varied educational backgrounds and life experiences.

However, we strive to go beyond this organic diversity and we are currently developing a strategy to better measure our ability to do so.

As of December 31, 2023, 40% of our senior leadership team and 14% of our Board members were female.

We are committed to intentional talent acquisition, retention, and development practices to support our diversity initiatives and to build a competitive workforce.

We measure and track our diversity and intentional talent acquisition, retention, and development practices.

Compensation and Total Rewards

10 unchanged sentences

We conducted our last employee engagement survey in October 2022.

We expect the next survey will be distributed in 2024 and we intend to conduct our employee engagement surveys every other year moving forward.

Approximately 56% of full-time GrafTech employees participated in the October 2022 survey.

5 unchanged sentences

The performance management system connects employees with job-specific professional development training and continuing education opportunities to help them progress along their career and growth path.

We conduct mid-year and annual performance reviews for all salaried employees to assess both job competencies and performance relative to GrafTech’s core competencies.

We conduct mid-year and annual performance reviews for all salaried employees to assess both individual job competencies and performance relative to GrafTech’s core competencies.

During annual performance reviews, we discuss progress towards personal career goals, refine career aspirations, and connect employees with specific pathways to achievement.

3 unchanged sentences

Securities and Exchange Commission (“SEC”).

We maintain our website at http://www.graftech.com.

We maintain our website at https://www.graftech.com.

Information on, or accessible through, our website is not part of this Annual Report.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business