GrafTech's Q1 2025 Earnings Call: Unpacking Contradictions in Market Share, Pricing, and Demand Dynamics

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Sales Volume and Market Share Growth:
- GrafTech's sales volume grew by 2% year-over-year in Q1, and they are on track to increase sales volume by a low-double-digit percentage on a full-year basis compared to the previous year.
- The growth was driven by leveraging their customer value proposition and capitalizing on commercial momentum, particularly in the United States where sales volume increased by nearly 25% year-over-year.

Cost Reduction and Operational Efficiency:
- GrafTech reported a 23% year-over-year reduction in cash COGS per metric ton in 2024 and is on track to achieve an incremental mid-single-digit percentage year-over-year decline in cash COGS per metric ton for 2025.
- These reductions are a result of aggressively reducing costs, from fixed and variable operating expenses to corporate overhead costs, while maintaining product quality and reliability.

U.S. Market Share and Pricing Strategy:
- GrafTech is actively shifting its sales mix to the United States due to its higher-priced market, which is critical to optimizing the order book.
- The company is focused on increasing its volume and market share in the U.S., expecting to outpace its Q1 growth rate on a full-year basis for 2025.

Tariffs and Trade Policies:
- GrafTech is well-positioned to capitalize on potential opportunities from increased tariffs, such as the recent 10% tariffs on Indian graphite electrodes, which could lead to decreased competition in the U.S. market.
- The company is utilizing its integrated global production network to mitigate tariff impacts, ensuring flexibility in product flows and minimizing costs.