GrafTech is fighting two battles at the same time, and the second quarter made the shape of that fight clearer. Sales volume of 30.8 thousand metric tons was 8% higher year over year, capacity utilization climbed to 74% from 65%, and the order book remains more than 90% committed for the full year, yet realized price fell 7% to roughly $3,900 per metric ton, net sales slipped 3% to $127.4 million, and the company posted a $40.5 million net loss for the quarter with adjusted EBITDA of just $1.9 million. GrafTech is winning the volume war in a still-sluggish global electric arc furnace steel market, but the price war continues to compress margins because graphite electrode industry pricing does not yet reflect the indispensable role the product plays in EAF steelmaking. Management is responding with announced price increases of $600 to $1,200 per metric ton on uncommitted volume, active support of trade cases in the United States and Brazil, deliberate volume discipline in low-margin regions, and a new $50 million at-the-market equity facility filed in May to keep liquidity optionality intact.
The investment case rests on three observable variables. The first is realized price, where the 15% spread GrafTech has already secured on new commitments versus comparable first quarter contracts needs to flow through the second half income statement at scale. The second is volume mix, where 29% United States volume growth signals that the highest-priced region is being captured at the expense of low-margin export tonnage. The third is the cash cost per metric ton, which management guides to a low single-digit percentage decline for 2026, with second quarter cash cost of goods sold per MT already down 6% to $3,517. Together, these three levers define whether adjusted EBITDA inflects from a first half burn of negative $11.7 million to a sustainable positive run rate exiting 2026.
The thesis confirms if second half adjusted EBITDA turns durably positive, if realized price on new contract commitments continues to print at or above the announced $600 to $1,200 per MT increase, and if the United States volume mix holds above 25% of total shipments. The thesis breaks if graphite electrode industry pricing remains stuck despite trade case activity, if EAF steel demand outside the United States weakens further, or if liquidity tightens because the company is forced to draw the revolver beyond the $107.6 million of available capacity to fund working capital and debt service of roughly $44.5 million of cash interest already paid in the first half.