Good day, ladies and gentlemen, and welcome to the GrafTech Second Quarter 2023 Earnings Conference Call and Webcast. At this time, all lines are in a listen-only mode. Following the presentation, we will conduct a question-and-answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Friday, August 4, 2023. I would now like to turn the conference over to Mike Dillon. Please go ahead. Thank you. Good morning, and welcome to GrafTech International's Second Quarter 2023 Earnings Call. On with me today are Marcel Kessler, Chief Executive Officer, Jeremy Halford, Chief Operating Officer, and Tim Flanagan, Chief Financial Officer. Marcel will begin with opening comments. Jeremy will then discuss safety, sales, and operational matters. Tim will review our quarterly results and other financial details. Marcel will close with 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 Marcel. Good morning, everyone. Thank you for joining GrafTech's second quarter earnings call. I will begin by highlighting four key points we will get discussed on our call today. First, our performance for the second quarter was consistent with our expectations and represented a sequential improvement in key metrics. This included quarter-over-quarter growth in sales volume and adjusted EBITDA, as well as a sequential reduction in recognized costs on a per-ton basis. Second, while we continue to see improvement in our business, market indicators point towards further softness in steel production for the remainder of the year. With the resulting impact on the demand for graphite electrodes, our expectations for the second half of 2023 are more tempered. However, we remain optimistic about 2024 recovering to improved levels of demand. Third, we continue to successfully execute our plans and strategies as we manage the business in response to the short-term challenges in the environment. Fourth, we remain optimistic about the long-term outlook for the business. We are taking actions that we believe will optimally position GrafTech to benefit from medium to longer-term industry tailwinds and deliver shareholder value. As Jeremy and Tim will provide more detail on our second quarter results, let me turn to the second topic, the current business environment. Steel industry production remains constrained by global economic uncertainty. At the macro level, the global manufacturing PMI, as reported in July, has fallen to a six-month low, and business and consumer confidence continues to be subdued. This contributes to steel industry output remaining below prior year levels, with most regions showing production declines. This, in turn, has resulted in ongoing softness for near-term demand for our products. As a result, we have lowered our volume expectations for the second half of 2023. We now estimate our sales volume for the full year of 2023 will be in the range of 95,000-105,000 metric tons, as compared to our previous estimate of 100,000-115,000 metric tons. Sales volume in the third quarter is expected to be broadly in line with sales volume for the second quarter of this year. We remain optimistic for a recovery to improved levels of electrode demand and sales volume in 2024. Based on the latest outlook from the World Steel Association, global steel demand outside of China is projected to increase 4% in 2024. Year-over-year growth is expected in all key regions in which we participate. This includes a projected 6% year-over-year increase in European steel demand, a 2% increase in North America, and a 3% increase in the Middle East, all of which should drive demand, should drive demand recovery for graphite electrodes. We recognize steel industry performance will be dependent on natural conditions. As such, we continue to focus on those things that are within our control to manage near-term market uncertainties. This includes proactively reducing our production volume to align with our near-term demand outlook, closely managing our operating costs, capital expenditures, and working capital levels, and making targeted investments to further improve our competitive positioning and support long-term growth. We continue to be pleased with the execution of our plans and the progress to advance our business. Let me briefly highlight several accomplishments since our last call, starting with our manufacturing operations. Our facility in Monterrey, Mexico, continues to run as expected. We continue to make significant progress on our risk mitigation strategies related to connecting pins and initiatives to increase our operational flexibility. As you will recall, early in the second quarter, we received the regulatory approval to restart production activities at our St. Marys facility in Pennsylvania. Following this milestone, we began production operations at the plant, with activities expected to further ramp up in the coming months to increase our operational flexibility. Turning to the commercial front, during the second quarter, we announced the opening of a new sales office in Dubai, increasing our presence in this important region. This supports our commercial strategy to operate with a global footprint as we expand our sales and technical service capabilities in key geographies. In addition, we entered into new multi-year electrode sales agreements with certain customers in North America and Europe. This reflects their confidence in GrafTech's ability to reliably deliver high-performing products over time. We also continue to make progress on the sustainability front. We joined the United Nations Global Compact and are excited to be participating in this important initiative alongside many other leading companies. We look forward to building upon our ESG strategies for the benefit of the environment, our business, and our stakeholders as we help shape a better and more sustainable future. To that end, we encourage you to read our latest sustainability report that we recently made available on our website. Finally, during the second quarter, we completed a $450 million senior secured notes offering. As Tim will discuss further, this offering and the related repayment of our term loan extended our debt maturity profile by about four years. At the same time, we remain focused on maintaining sufficient liquidity to navigate the current environment via our working capital management and other initiatives. This supports our financial flexibility as we take actions that we believe will optimally position GrafTech to benefit from industry tailwinds and deliver shareholder value. I will spend a few minute moments on those tailwinds at the end of our prepared remarks. First, let me turn the call over to Jeremy. Thank you, Marcel. Good morning, everyone. I'll start my comments with a brief update on our safety performance, which is a core value at GrafTech. We are pleased that our year-to-date recordable incident rate for 2023 reflects substantial improvement from the prior year level and continues to place us among the top operators in the broader manufacturing industry. We will remain highly diligent in this area and seek to further improve this metric as we continue working toward our ultimate goal of zero injuries. Let me now turn to the next slide for an update on steel industry trends and additional context for our 2Q results and our outlook commentary. As Marcel indicated, the overall performance of the steel industry has remained somewhat constrained. During the 2Q, we saw further sequential improvement in certain market indicators. However, these metrics remained below year-ago levels. Global steel production outside of China in the second quarter was approximately 208 million tons. This represented a 4% sequential improvement from the first quarter, but a 2% decline compared to the same period in the prior year. On a year-to-date basis, global steel production outside of China was down 4% through the second quarter, with most regions showing production declines. Turning to global capacity utilization outside of China, for the second quarter, the rate was flat on a sequential basis at 66%, but remained down by approximately 400 basis points compared to the second quarter of last year. Looking at other market indicators, global steel pricing declined during the second quarter alongside steel demand, with most market projections pointing to a continuation of subdued steel pricing and demand in the near term. On a regional basis, in Europe, weak macro fundamentals have persisted, including a soft construction market and high inflation rates that continue to impact market confidence. Last week, the European Steel Association issued their latest 2023 outlook, noting that they expect a 3% decline in EU steel demand for the full year. This compares to their previous projection of a 1% decline. In the U.S., utilization rates picked up in the second quarter, averaging 77%, although they remained below year-ago levels. The sequential increase reflects continued strength in the U.S. construction sector. Overall, this significant global economic uncertainty continues to be an overhang on industry demand in the near term. In the medium to longer term, we remain bullish on steel industry fundamentals for the reasons we've previously indicated, thereby supporting future graphite electrode demand. Turning to the next slide in GrafTech's second quarter performance. Our production volume was approximately 25,000 metric tons, representing a 43% year-over-year decline, but up nearly 60% on a sequential basis compared to the first quarter. This resulted in a combined capacity utilization rate for our three primary electrode facilities, just below 50% for the second quarter, compared to 31% in the first quarter. Subject to market conditions, we expect utilization rates at our manufacturing facilities to increase in the second half of 2023 compared to first half levels. This reflects our continued focus on proactively managing production volume to align with our evolving demand outlook. Turning to sales, our second quarter sales volume of approximately 26,000 metric tons was in line with the outlook we provided on the last call. While representing a 38% year-over-year decline, sales volume was up 56% on a sequential basis compared to the first quarter, as we continue to recover from the impact of the Monterrey suspension. Shipments for the second quarter included 8,000 metric tons sold under our LTAs at a weighted average realized price of $9,000 per metric ton, and nearly 18,000 metric tons of non-LTA sales at a weighted average realized price of approximately $5,600 per metric ton. As anticipated, the weighted average price for non-LTA sales was below the first quarter level. Net sales in the second quarter of 2023 decreased 49% compared to the second quarter of 2022. In addition to the lower sales volume, the ongoing shift in the mix of our business from LTA to non-LTA volume contributed to the year-over-year decline. As we proceed through the third quarter of 2023, the softness in the commercial environment that we have discussed has tempered our expectations. Specifically, the year-over-year decline in global steel production and the constrained steel utilization rates have limited the ability of our customers to significantly drive down their electrode inventory to typical levels. Further, with the recently revised outlook from the European Steel Association and considering the difficult seasonal slowdowns in Europe, our near-term outlook for European electrode demand is cautious. Given these dynamics, we anticipate our sales volume for the third quarter will be broadly in line with the second quarter. For the fourth quarter, we expect a sequential increase in sales volume. Factoring all of this in, on a full year basis, as Marcel mentioned in his remarks, we estimate sales volume will be in the range of 95,000-105,000 metric tons for 2023. Let me now turn it over to Tim to cover the rest of our financial details. Thanks, Jeremy. For the second quarter, we had a net loss of $8 million, or $0.03 per share. Adjusted EBITDA was $26 million, a decrease from $158 million in the second quarter of 2022. The decline primarily reflected the lower sales volume, higher year-over-year costs on a per metric ton basis, and the continued shift in the mix of our business towards non-LTA volumes. Adjusted EBITDA margin was 14% in the second quarter. Expanding on costs. As reflected in the reconciliation we've provided in the earnings documents posted to our website, cash COGS per metric ton excludes depreciation and amortization, as well as costs of goods associated with byproduct sales and other non-cash factors. Reflecting the full year impact of raw material, energy, and freight cost increases that occurred throughout 2022, we continue to sell higher-priced inventory during the second quarter of 2023. In addition, during the quarter, our cash costs included approximately $10 million of fixed costs that otherwise would have been inventoried if we were operating at normal production levels. Factoring all of this in, for the second quarter of 2023, our cash COGS per metric ton were approximately $5,250, in line with our expectations. This represented a 7% sequential decrease compared to our high-water mark of $5,600 in the first quarter of 2023. Looking ahead, we continue to expect our cash COGS per metric ton in the second half of 2023 will be below the level recognized in the first half of the year, but will be above our previous expectations, and I'll provide some more color on that here in a moment. As we've anticipated, we're starting to see relief from some of the inflationary pressures for certain key elements of our cost structure, including decant oil, energy, coal tar pitch, and freight. Given where we're at in the fiscal year and with our current inventory levels, this won't have a meaningful impact on our costs in the second half of 2023. Furthermore, the decline in our volume outlook has a two-pronged effect on the cash COGS per metric ton that will be recognized in the second half of this year. First, with the lower sales volume, this extends the time it takes to work through higher-priced inventory on our balance sheet. Secondly, with the corresponding decline in production volume, we will continue to recognize fixed costs that otherwise would be inventoried if we were operating at normal production levels. As a result, we remain focused on managing our controllable costs and working to bring down our inventory levels. As we look ahead, we continue to expect market pricing to decline further in the medium to longer term for certain key elements of our cost structure. For these reasons, and with the anticipated increase in our capacity utilization as sales volume levels improve in 2024, we remain optimistic that our cost per metric ton will improve as we move beyond the current year. Now turning to cash flow. In the second quarter, we used $9 million of cash in operating activities, while adjusted free cash flow was essentially break even for the quarter. Our second quarter adjusted free cash flow included the benefit of approximately $24 million related to the settlement of interest rate swaps. The majority of this benefit was a result of terminating our interest rate swaps in connection with the repayment of our $434 million term loan balance at the end of the quarter, which I'll speak more about in a moment. We anticipated the second quarter would represent the low-water mark for cash flow in 2023, and that continues to be our expectation. With our focus on managing our costs, capital expenditures, and working capital levels, we continue to expect the adjusted free cash flow to be positive for 2023. Moving to the next slide. During the second quarter, we completed a private offering of $450 million Senior Secured Notes due December 2028, which coincides with the maturity of our existing $500 million Senior Secured Notes. The net proceeds of this offering were used to repay the term loan that was due in the first quarter of 2025, this effectively extended our debt maturity profile by nearly four years. Our gross debt to adjusted EBITDA ratio was 3.8x as of June 30th, compared to 1.7x at the end of 2022, reflecting the decline in EBITDA for the first two quarters of 2023 on a year-over-year basis. On a net debt basis, we ended the quarter at a ratio of 3.3x. As of June 30th, our liquidity was $337 million, consisting of $132 million of cash and $205 million available under our revolving credit facility. This reflects the financial covenant that limits borrowing availability under our revolver in certain circumstances. However, we do not anticipate the need to borrow against our revolver in 2023. We remain confident we have ample liquidity between the cash on hand and the borrowing availability to navigate the current market conditions and to continue to make targeted investments. For the full year, we'll continue to expect our capital expenditures will be in the range of $55 million-$60 million. I'll now turn it back to Marcel for some closing comments. Thank you, Tim. Let me reiterate that we remain confident in our ability to overcome near-term headwinds. We are successfully executing our plans to navigate the current environment and are encouraged by the progress our teams continue to make. We remain optimistic about the long-term outlook for our business and are taking actions that we believe will optimally position GrafTech to benefit from sustainable industry tailwinds. Specifically, decarbonization efforts are driving a transition in steel, with electric arc furnace steelmaking continuing to increase share of total steel production. In 2022, EAFs accounted for approximately 50% of global steel production outside of China, which increased from 44% in 2015. With this trend of EAF share growth expected to continue, we anticipate demand for graphite electrodes to experience accelerating growth. We are currently tracking more than 200 announcements of planned EAF capacity additions by steel producers around the world. We estimate that these additions, along with production increases at existing EAF plants, could result in incremental annual graphite electrode demand outside of China of 200,000 metric tons by 2030. This compares to global annual graphite electrode demand in 2022, outside of China, of approximately 680,000 metric tons. On a regional basis, reflecting these industry announcements, this could translate into incremental graphite electrode demand as follows: 65,000 metric tons in Europe, 25,000 metric tons in North America, and over 55,000 metric tons in the Middle East and Africa. In addition, the demand for petroleum needle coke, the key raw material we use to produce graphite electrodes, is also expected to accelerate. This is driven by its use to produce synthetic graphite for the anode portion of lithium-ion batteries used in the rapidly growing electric vehicle market. Based on analyst estimates regarding the projected growth in electric vehicle sales and battery pack sizes, we estimate this could result in global needle coke demand for use in EV applications, increasing at a compound annual growth rate of over 20% through 2030. We view the growing demand for needle coke as another positive long-term trend, as higher demand should result in elevated pricing. Given the high historical correlation between petroleum needle coke pricing and graphite electrode pricing, this trend should translate to higher market pricing for electrodes. We are well positioned to capitalize on these favorable industry tailwinds. We operate three of the highest capacity electrode manufacturing facilities in the world. With these facilities and the recent restart of St. Marys, we have strategic flexibility and a global footprint that gives us proximity to large EAF steelmaking regions. Through our Seadrift production facility, we remain the only large-scale graphite electrode producer that is substantially vertically integrated into petroleum needle coke. These sustainable competitive advantages are critical differentiators and foundational for our ability to serve our electrode customers. As we discussed on the last call, we also see long-term value creation opportunities beyond our existing electrode business. Specifically, we continue to study the ways in which we can participate in the anticipated growth of EV, of the EV battery market via two potential avenues. First, by leveraging our assets and technical know-how in the area of petroleum needle coke production, given the expected demand growth for this key raw material. To that end, we have recently filed a permit application to significantly expand the production capacity at Seadrift.... Second, by leveraging our graphitization resources and expertise to produce synthetic graphite material for battery anodes. While we have not yet made any firm commitments, we continue to test our needle coke and graphitization capabilities with several third parties, and we are confident in our ability to meet the specifications and quality required for battery applications. We are excited about the possibility of participating in the growth of the EV battery market and look forward to sharing more as we can. In closing, we are effectively executing our plans to manage the current environment, and I want to thank the entire GrafTech team for their continued efforts and commitment. Our long-term thesis remains intact. We are an industry-leading provider of a consumable product that is mission-critical for the growing electric arc furnace method of steelmaking. We possess a distinct set of capabilities and competitive advantages. Lastly, as a result of our disciplined capital allocation strategy, we have a strong balance sheet and ample liquidity to navigate the near term. For these reasons, I remain confident in our ability to deliver shareholder value. That concludes our prepared remarks. We will now open the call for questions. Thank you. Ladies and gentlemen, we will now begin the question-and-answer session. Should you have a question, please press star followed by the one on your touchtone phone. You will hear a three-tone prompt acknowledging your request. Should you wish to remove yourself from the queue, please press star two. If you are using a speakerphone, please lift the handset before pressing any keys. One moment please, for your first question. The first question comes from Katja Jancic of BMO Capital Markets. Please go ahead. Hi, thank you for taking my questions. Maybe starting off with the spot pricing environment, I think you mentioned you expect spot prices to decline sequentially. Can you provide more color on the magnitude of decline you're expecting? Yes, thank you for your question, Katja. As we have noted, the second quarter price for our non-LTA site is below our first quarter levels, as was anticipated, given the softer environment. As Tim noted, I think there's some expectation that we may see further declines in the second half of the year. I fully understand the desire for more clarity on pricing expectations further into 2023 and beyond. However, I know I've said this before, right? For competitive reasons, we are going to refrain from providing our expectations on near-term pricing. We, in fact, have limited visibility on pricing further out. Understood. Maybe on the cost side, previously, you expected the full year 2023 costs to be up about 20% year-over-year. I'm assuming that is moving higher now, or how should we think about it? Yeah, you're, you're absolutely right. We said that, you know, we expected a 17%-20% increase. I think we guided to the high end of that range last quarter on a year-over-year basis. We'll, we'll end up somewhere north of that high end, and, but we fully expect to be still below kind of what we averaged for the first half of the year. First half of the year average is about $5,400 on a cash COGS basis. We'll be somewhere above that 20% increase level and, and $5,400 to give you some parameters. Perfect. Thank you so much. Thank you. The next question comes from Arun Viswanathan of RBC Capital Markets. Please go ahead. Thanks for taking my question. Just wanted to clarify a couple things. Did you say that the Q3 sales volume would be similar to Q2, and then Q4 will be higher? Okay. Great. Thanks for that. Given that then, you've done about $40 million of EBITDA in the first half, the second half, I guess, you know, you will have similar volume in Q3, but maybe slightly higher volume in Q4. Would you get some more fixed cost leverage on that? Maybe your EBITDA is a little bit slightly better sequentially in Q3. There's some seasonal benefits as well, and energy costs are a little bit lower. How should we think about EBITDA maybe in Q3? Yeah. So, you know, as we, as we think about, you know, starting with the, the fixed cost leverage and, and, you know, we anticipate we'll continue to have some fixed costs that are expensed directly to the P&L that otherwise would be inventoried in the third quarter. This is, again, reflecting our, our intention of managing production levels in line with our overall commercial demand and our sales volume expectations. Kind of layering on top of that as well is, you know, while we've released some inventory during the first half of the year, we anticipate releasing more inventory and, and, and using as much of what we have on hand to support the sales forecast in the back half of the year as well. We, we would expect the plant still not to be running, considered normal or target levels. They'll be running harder than they have in the first half of the year, as, as we commented, but we'll still have some, some fixed cost leverage challenges in the back half of the year as well. Right. Thanks for that. Then, given that you're, you know, guiding to about that 95-105 of sales volumes, 100,000 of, of, of sales volume, that implies kind of a 50% utilization of your overall capacity. Is that right? What is it gonna take to really get, you know, back to a more normal environment? Is it, I guess, a number of factors, including a better Europe, you know, maybe some better industrial backdrop? I, I, I, I ask because there's some conflicting factors out there. On the one hand, we have a, a, a, a pretty robust automotive market. There's some reshoring and infrastructure projects that seem to be supporting, you know, better steel utilization. Again, you cited the mid-70s steel utilization rate, for US 77. Why are electrode utilization rates so low? I guess, is the overall question. Yeah. From a volume perspective, right? You asked, what will it take to get back to more normalized volumes? I think if you start by reflecting on 2023, there's really two factors impacting sales volume in 2023. First of all, you've got the Monterrey situation, which is kind of unique to us, then you've got the overall kind of macro environment that's weighing on each of the regions of the world differently, right? You see a more robust U.S. market, still not performing at the same level it was a year ago. You're seeing some strong performance, as you noted in automotive. Construction, you know, is, is continuing to be strong. I think there's a pretty optimistic outlook for infrastructure spending more broadly with the $2 billion-plus of spending that's anticipated on that front. Conversely, I think if you, you look at macro environments in other regions of the world, I think it's a little bit more challenged. Jeremy mentioned the European Steel Association's kind of revised outlook for the year being down to a 3% reduction in the current year versus what they previously thought was a 1% reduction. The combination of those things, I think you really have to go region by region to understand the dynamics and, and how that's affecting electrode demand. You know, I think as we, you know, have moved through Monterrey largely, this year with, with the strong operation of the plant thus far, continuing to work on the PIN mitigation strategy and rebuilding our PIN inventory, and the fact that, you know, we fully expect to be engaged with our customers in the, the commercial negotiation process here in the second half of the year, we think we're taking that, that challenge, off the table as we head into 2024. Really, the determination of, of where things and how things return to more normalized levels is the macro environment of each of those regions and, and how you see recovery. You know, I think, again, World Steel Association, the European Steel Association, are all predicting recoveries of, of different orders of magnitudes, in each of the regions of the world, which give us a pretty optimistic outlook that 2024, from an overall demand perspective for electrodes, will be better than this year. Okay, thanks for that. Again, just to, just to understand this further, you know, would you, would you say that there have been some capacity additions and those are being absorbed? I'm still not following why the electrode... I mean, I, and, and putting aside Monterrey, you know, your second half would still imply kind of a much lower utilization rate versus global steel utilization rates. You know, I'm, I'm just not following exactly why the electrode utilization rates are so low, even in, you know, potentially 2024. Yeah, I think the, the other factor that's going to weigh on that, on utilization rates is our inventory levels, first and foremost, and what we're carrying. Again, we're, we're actively working down the inventory that we've built over the last 18 months. Then also on this, the same time, and we talked about this in the last call as well, customer inventories, right? To the extent that the Monterrey situation caused people to, you know, pull forward some buying of electrodes that we're not seeing at these utilization rates work out yet, that's going to impact our utilization of our plants and the demand, you know, more broadly for graphite electrodes. Okay, that's helpful. Just one last one then. You know, as you look out into the future here, it appears that, you know, you've kind of gone through a pretty challenging time, and you're coming out on the other side of it. Monterrey is back up, up, and running. You know, you're going through some commercial renegotiations. Would you kind of characterize that first half of 2023 as a potential bottom? If so, then, you know, you'll, you'll, you'll slowly see, you know, utilization and volumes improve and fixed cost leverage improve, and then thus profitability also, as you look out into 2024 and 2025. Is that how you're looking at the world? Is that also allowing you to, maybe redirect some of your attention to, the EV markets and some of your initiatives there? Yeah. I think that's exactly how we, we see the situation, how we see, the situation evolving, too. I think the first half-... is clearly the bottom, as, as far as we can see today, primarily driven by the fact that, that Monterrey, it has been the key driver of the, the, the, the low performance in the second half, right? While there may be some lingering effect, lingering effect here for the second half of this year, this will be completely worked through by, by 2024. Yes. Your assessment, we would completely agree with that. What about the EV side? Could you elaborate on some of the initiatives there and, and maybe provide an update on what you're, what you're working on, thanks? As I mentioned in my prepared remarks, right, we have not made any firm commitments that we can speak to in terms of agreement with potential customers or significant investment to expand capacity. However, we continue to work with several third parties in two ways, right? One, is we are testing the needle coke at Seadrift for use as a battery anode material, and we are very confident that what we can produce at Seadrift is very well suited for this application. To that end, and also as per my prepared remarks, that we have just filed an application to expand the capacity of Seadrift here going forward. Secondly, we are working with third parties to use our graphitization assets that we currently exclusively use for electrode production, to graphitize that material for battery materials. In that case as well, we are very encouraged by the findings, given that, that the functionality, the capability, and the quality of the powder we can produce in our graphitization furnaces is very well suited for battery applications. We are progressing on both fronts, and we're gonna be very happy to share more about this as we can. Thanks. Thank you. The next question comes from Bill Peterson of JPMorgan. Please go ahead. Yeah. Hi, good morning, and thanks for taking my questions. The LTA volumes increased quarter-on-quarter with flat pricing, but based on your annual volume and revenue guidance, it would apply a step down in both in the back half of the year. Is that a fair assumption? If so, how should we think about the LTA and the cadence for the back half of the year? Yeah, we haven't changed the guidance for the full year. I think you're right. When you, you kind of do the math, you know, the math would suggest a slightly lower price, and that's really gonna be driven by a mix of LTA customers, right? Not all contracts are the same. You know, a lot of these contracts are the those that have been extended over time, and we've worked with customers to blend and extend those contracts out. I think we'll fall well within the ranges that we've provided on the LTA side. Okay, thanks for that. I guess, you know, looking at capital allocation, can you provide some additional color or rationale on the dividend suspension? I guess, you know, I understand the improvement in use of cash, but assuming that we're at the bottom and free cash flow generation should improve in the next year, I'm trying to get a feel for, for the rationale, and, and maybe what would you need to see to have this reinstated as we look ahead? Yes, so I think the suspension of the $0.01 per share dividend is consistent with our current capital allocation priorities, right? It's, on the one hand, focusing on maintaining sufficient liquidity to navigate the short-term headwinds, and also making targeted investments to position our business for long-term growth. Regarding the possibility of the dividend being reinstated in the future, as you know, dividend declarations are always at the discretion of the board, so I will refrain from speculating at what point that might happen. Okay, thanks for the color, and we'll look forward to following the progress, and good luck. Thank you for your question. Thank you. The next question comes from Curt Woodworth of Credit Suisse. Please go ahead. Yeah, thanks. Good morning. You know, with respect to, you know, the fixed cost under absorption and some of the stuff you mentioned in terms of the inventory, you know, how should we think about what, what your cost structure should look like on a normalized basis? If you were to assume, you know, more normalized utilization, and kind of run some of the spot, you know, coal tar, pricing, decant oil pricing, and can you give us a sense of, of what that could look like today? Yeah, I mean, so... Thanks for the question, Curt. You know, I think if you look back a couple of years, historically, we've been in that $3,600 a ton on a cash COGS basis. You know, I think just given the fact that so much of our cost structure is market-driven, you know, we should be able to drive back towards that as you see kind of normalization of the coal tar markets, the decant oil markets, and certainly we've seen improvement, as I mentioned in our prepared remarks. A number of those areas, we're seeing some beneficial in commodity price movements that are helping us, and will continue to help us as we move into 2024. You know, other elements of the cost structure, you know, in particular, labor, inflation in those costs tends to be stickier, so you won't work all of that out. While, you know, we'll, we'll be aspirational to get back to that $3,600 level, we're, we're likely not to get not gonna get there, anytime, anytime sooner without investment. We'll see a, a significant reduction in costs as we head into next year as, as fixed costs- ... the leverage gets better with the return of volume. You know, we're seeing the, again, the benefit on some of the variable stuff, and we'll continue to work diligently to manage our period or fixed costs, as we've done so this year, and continue to keep our plants as efficient and cost-effective as possible. We'll see good movement heading into next year, but we may not get all the way back to that $3,600 level. Okay. Then, kind of consistent with Arun's question, just, you know, looking at your, you know, sales volume utilization, it does seem, you know, much more higher rate of decline versus what we're seeing in the global steel production data. I, I think, you know, one of the questions people have is with respect to, to Monterrey and, and just all the gyrations in the industry, and arguably, there's probably more import pressure, from China and India in this type of market as well. Can you, can you comment at all on, you know, your market share? Do you, do you feel like you, you've lost share? Do you feel like your contract position or your relationships are generally still, you know, intact in, in terms of thinking about 2024 recovery, that you should benefit as the industry recycles higher? Yeah, so a couple of thoughts. I don't think we can comment directly on market shares. I don't think we have enough transparency around that. In regards to the impact of Monterrey, I think we've talked about that in some detail on the last two calls, right? During that suspension, in late 2022, right, we, we lost the ability to negotiate volumes, especially for the first half of 2023, and maybe even to some extent in the second half, right? That was the worst possible time for that suspension. That, that is really the key driver of the impact and underperformance, and the disconnect between what you're highlighting here, the steel utilization rates versus the electro plant utilization rates. I think it's the, the indirect impact of Monterrey, the loss of that negotiation window during the most critical negotiation time in late 2022. Okay. Do you want to add anything? Please, please go ahead, Trevor. Okay, understood. Just with the expansion at Seadrift, you know, I think in the past, there's the CapEx for kind of a replication of that asset. I, I can't remember exactly, but $600 million-$700 million, and I think there was some potential to maybe do a more subscale investment. You know, can you comment on how that would actually work, just given, you know, given your capital structure today? Is it the type of thing where you would try to get a JV investment, and then you would get, you know, a fee to operate the facility? Or, you know, how would that look like? Yes, we have commented in the past, right, that a replication of Seadrift would be a very expensive endeavor, right? That's not what we are undertaking here. We are essentially filing a permit, a permit application for an expansion of the existing facility. We believe that this is the most capital-efficient way to add capacity in the Western world, right? As you know, we are one of the only two Western providers of needle coke, and our Seadrift facilities is set up, is set up in such a way that with a relatively modest capital investment, we can get a significant increase in capacity. To be a bit more specific, Seadrift currently has a nameplate capacity of 140,000 metric tons of needle coke. With the anticipated expansion, we would increase that by approximately 40%, which is a combination of what we call calcined and green needle coke. I don't want to go into a technical rabbit hole, but typically, calcined needle coke is what we and others use for the manufacturing of graphite electrodes. Battery materials often, or battery material manufacturing, is often done with green needle coke, but not in all cases. What the actual production increase will be, would depend on the blend of how much of that would actually be green needle coke versus calcined, or how much of that production would go to battery materials versus versus electrodes. It's important to point out that we are not talking about a multi-hundred million dollar replication of the Seadrift asset here, but an expansion of the existing facility with a relatively modest additional capital. Okay, thank you. Thank you. The next question comes from Alex Hacking of Citi. Please go ahead. Yeah, good morning. Could you maybe discuss, you know, where you think needle coke prices are in the market right now? I mean, I understand you guys aren't really in the market buying, but if you have some sense, that would be helpful. Thanks. Yeah, sure. Excuse me, thanks, Alex. It's been a rather volatile commodity for us over the last few years. But right now we're seeing it in the range of about $1,800 for super premium needle coke, maybe a couple hundred dollars below that for the more normal premium grades. Somewhere in that range, it's pretty low on the historical trends that we've seen. You know, a year ago, we were looking at things at approaching $3,000 a ton. The year before that, it was down to, you know, below $1,500 a ton. And we've trended lower lately, but we anticipate some strengthening of that as the EV market picks up the slack from the softness in the electronics. Okay, thanks. That's helpful. I, I guess kind of circling around on a question that's been asked a couple of times, but I'll maybe ask in a slightly different way. You know, if you look at your implied utilization rate in the second half of the year, it's 50%-60%. You know, I think, you know, as it was originally framed, Monterrey was really gonna be a first-half issue in your ability to, to contract. I mean, do you think the entire electrode industry right now is running at 50%-60% utilization rate? Like, that seems, that seems a little low. Like, it, it seems like your utilization rate is running lower than what some of the others are running at. Alex, I would point to, and not going into specifics of, of our competitors in the market, but they've said publicly on, on their recent calls that in, you know, various regions, they're running at or below 50% capacity utilization as well. I think the whole electrode industry as a whole is running at a fairly low utilization rate right now. Okay, that's, that's helpful. Thanks. Then I guess just one more, if I, if I may. I don't want to ask too many questions, but could you maybe discuss the impact of tariffs on the U.S. market? How you see that, you know, is that something that you see, you know, benefiting GrafTech? Thanks. Yeah, both the U.S. market as well as the European Union do have tariffs in place against imports. In the case of the U.S., it's covering Chinese imports. In case of the European Union, it's both Chinese as well as Indian imports. There are various levels of tariffs depending on the size of the electrodes and the provider, but they are quite significant, and I think they have been quite effective in limiting the import volumes from these regions. Both are quite important for GrafTech. I mean, have you seen, I don't track the data, unfortunately, but have we seen a kind of a material decline in, in Chinese imports since the tariff was put in place? Yeah, I think Chinese imports into the U.S. are relatively low or immaterial on an overall basis. I don't know what they looked like, you know, prior to 2017 timeframe when those tariffs were put in place. Yeah, but there is not much Chinese supply finding its way into the U.S. market as a result of these tariffs. There really has been no change- Okay. No change in recent years on that. Okay, sorry, I was mistaken. For some reason, I thought there had been a change in the tariff structure. I'll discuss that with you offline. All right, thanks for the question. Thanks. Thank you. Our last question comes from Abraham Landa of Bank of America. Please go ahead. Good morning. Thanks for taking my question. Just on, I kind of want maybe an update on Monterrey and just, maybe, I know, I know, you know, maybe not operating as efficiently as it could be, given, like, the lower volumes, but where you are right now, kind of all the... push all the noise that we saw in the fourth quarter of last year. I just want to verify that everything is finalized in terms of, like, government approvals there as well. Yeah, thanks. Yes, the Monterrey site is running regular production in the same way that it was prior to the suspension. Yeah. As always, we continue to operate within the required emission levels. You know, in, in addition to focusing on compliance with the emission levels, we're also significantly increasing the frequency of our interactions with the regulatory agencies, as well as our neighbors in the surrounding community, where, you know, we've been an economic pillar of that community for over 60 years. So, you know, I'm happy to say the plant is running the way that we need for it to and continuing to comply with all of the legislative requirements. I guess, following up on some other people questions as well, it, it could be a little early just on more longer-term LTA type of contracts. I know that's typically more 4th quarter-ish timeframe, but do you have any early indications of how those discussions would go? You know, I imagine others, you know, some of your customers got graphite electrodes from other different sources. Are there maybe early discussions of kind of returning back to, just given that Monterrey is back up and running, et cetera, kind of recapturing some of that share? As we, we have highlighted on this call as well on the previous call, we, we have entered into several, what we call electrode service agreements, which are multi-year agreements, typically of 3 to 5 years out, with several customers in both the United States and in Europe. Now, they are quite different in their structure from the LTAs, and obviously very different in terms of pricing, right? They are more closely tied to the current spot pricing. Now, we do get a premium given the long-term nature of it, so that the structure is essentially the premium over current spot price and typically includes some inflation protections for us. Now, they are not yet material in terms of overall volume for 2023. We don't expect they will be material in 2024. We do actually, in light of the challenges we've had with Monterrey, I, we take great comfort that our customers continue to be relying on, on us as, as a reliable supplier of high-quality electrodes through these, these, these multi-year service agreements or ESAs, as we call them. I would, I would just add to that, as we look out to 2024, it's probably premature to start talking about, you know, specific volumes, just given the fact that the bulk of those negotiations start here at the end of the 3rd quarter and into the 4th quarter. But from our standpoint, where we sit today, you know, the fact that, as Jeremy commented, you know, Monterrey is running well. ... We've rebuilt our pin stock inventory. We continue to execute on the plans at St. Marys, to get that plant up and operational as well. You know, we, we fully expect to be engaged in, in that process, as we have been in past years, absent the, the 2022 cycle. We feel pretty good heading into that negotiation window. I think at the end of the day, customers have and will continue to appreciate our value proposition, right? We're the only, we're the only company, the only tier one company, and in fact, one of the only, electrode producers in the world that makes pins at multiple sites. We've got pins, so we can provide a, an assurity of supply now that nobody else can. We have industry-leading customer service, both through the our technical service representatives as well as our Arc-Tech product. We're present in their regions. We, we have not only an operating but also a commercial presence in several regions. We expect that to support our support our commercial efforts as we head into that negotiating season. Should we expect, during the next call, should we expect more color around that and kind of like an early look into kind of how those negotiations are going and into 2024? Yeah, I think we'll have a better sense in, you know, at that time, and, and we'll be one quarter closer to 2024 and, and an understanding of the macro environment as well. Thank you. Thank you. This concludes our question and answer session. I will now hand the call back over to Mr. Kessler for closing remarks. Thank you, operator. I would like to thank everyone on this call for your interest in GrafTech, and we look forward to speaking with you next quarter. Have a good weekend. Ladies and gentlemen, this does conclude the conference call for today. We thank you for your participation and ask that you please disconnect your line.