Matthew Vittorioso: Okay. And then maybe just, Tim, if you could just maybe talk a little bit more about — I think you’ve probably been out seeing customers quite a bit in your new role and looking to maybe rebuild certain customer relationships post some of the LTA friction that has occurred. Maybe just talk a little bit about how those conversations are going? And then also, I think you’ve mentioned some of the other services that you guys provide or the value-add that GrafTech provides away from just a good quality product. Maybe just talk briefly about some of those services that you guys provide monitoring electric arc furnaces and whatnot just kind of increase the value-add that GrafTech offers.
Tim Flanagan: Yes. And I’ll speak to the customer side, and then I’ll let Jeremy comment on architect and what we’re doing there with our customer technical service team. But I mean, listen we are moving away from the LTA world and the structured contracts to a more spot-oriented business. And so I think, it’s more important than ever that we’re engaging with customers on a regular and maybe even more frequent cadence as we go forward. And like any business, all relationships are not equal, but it is important that we are engaging and putting energy to every customer relationship we have. And while not — getting into particular customer situations. I think overall, our conversations have been encouraging and I think we’ve really been out there stressing a couple of things.
One, we want our customer to understand the value proposition and what we bring to the table. Two, we want to make sure we are meeting their needs from a depth and breadth of product offerings, which includes how we are supporting them via architect and CTS. But I think lastly and probably most importantly is that they understand we are focused on long-term partnerships and remain willing to invest in those partnerships alongside of them. We made some big announcements in the fourth quarter as it related to our footprint, our cost structure and things that we are doing, and we thought it was important that we had direct face-to-face conversations with our customers about what we are doing, why we’re doing it and how we’re positioning ourselves to be long-term suppliers for them.
So all-in-all, I think very positive developments from a customer standpoint. Jeremy, do you want to comment on architect and CTS?
Jeremy Halford: Yes, I would say that all of this is just part of the long-term investment we’ve been making month-over-month, year-over-year in strengthening our relationships with our customers, between the CTS individuals that go on a regular base to be physically present in the steel mills and meet with not just the procurement, but it’s really our opportunity to meet with melt shop managers and the people that are actually operating their furnaces. And all of this is part of an effort to help our customers be better at what they do. And architect is a tool that we use that not only gives them better visibility into their own operations, but also gives us an opportunity to provide remote support when we can’t be there in person.
And we continue to work with the customers to understand where else or how else we can deploy a tool like that in order to continue to benefit them and help them continue to get better what they do. So we really appreciate the partnership that we have with those customers. And through the support that we give them, they also help us make our product offering better as well.
Matthew Vittorioso: That’s helpful. Maybe just lastly, I know you’ve commented on liquidity and certainly understand the comments there. I mean, I guess, I would say, with $165 million of cash on hand to say that you won’t borrow against the revolver, I don’t think you need to — it’s comforting, but maybe it doesn’t say a whole lot. But there’s certainly been financial news sources highlighting that there are groups out there talking about ways that they could maybe offer you additional liquidity. Maybe just comment on your openness and you think it makes sense now to consider such a move just in case the downturn in pricing holds for longer than you expected? I mean sometimes, it’s better to just take the liquidity when it’s offered and have it for a rainy day?
Tim Flanagan: Yes. Thanks. And again, I’m not going to comment on market speculation or articles quoting unnamed sources. But I think, to the latter part of your question, right, I think even since I joined 2.5 years ago, we’ve always had a look to our balance sheet, our capital structure and try to be proactive in terms of refinancing the revolver, refinancing our notes. So we’re always having conversations with our advisers, our banks about our capital structure and how to best optimize our positioning. But beyond that, I think we’re comfortable with the liquidity position we sit in today. and we’ll continue to work on the cost side of our business and focus on those things that we keep control.
Matthew Vittorioso: Got it. Thanks for the time. Appreciate it.
Tim Flanagan: Thank you.
Operator: Your next question comes from the line of Abe Landa from Bank of America. Please go ahead.
Abraham Landa: Hi, good morning. Thank you for taking my questions. Maybe the first one, just on — I know you’ve historically provided this — but there were needle coke prices in 1Q, and then where do you see them now and kind of for the rest of the year? I know, we see some charts on Bloomberg versus it looks like the Chinese version has kind of declined 10% year-to-date.
Jeremy Halford: Yes. So looking at export statistics, what we would see is that things are pretty much where they were a quarter ago. we would be looking for pricing for super premium needle coke in the range of $1,000 to $1,300 for the [higher rent] (ph) or super premium needle cokes that are typically used in our applications. With regard to the rest of the year, of course, we don’t know, right? As you know, needle coke pricing can be highly volatile reflecting the market conditions at the time. But currently, we see things at $1,000 to $1,300. But in the recent past, we’ve seen prices as high as $3,000 in 2022. And as low as $1,000 a year before that kind of consistent with where we find ourselves currently. So I don’t really have a good guidance for you for where I think that’s going to go for the balance of the year. volatility is really kind of key in the needle coke space.
Tim Flanagan: Yes. And the only thing I’d add is, I think we saw a fairly steady quarter-over-quarter decline as we moved throughout 2023. And now we’ve probably seen a bit of flattening of the pricing here over the last quarter or two, and it’s held kind of in this range that Jeremy talked about.
Abraham Landa: That’s very helpful color. And then if I look at Seadrift, I mean, how does your costs at Seadrift kind of compared to the market pricing today? And maybe — what is Seadrift utilization currently? And kind of how do you expect that to trend as well?
Tim Flanagan: Yes. So Seadrift utilization is going to align with our overall kind of utilization rates, right? We’re running Seadrift in-line with kind of our internal demand for needle coke for our graphite electrode plants as we go forward. Kind of like our large electrode plants, right, running them at capacity makes them more cost effective. I’d say Seadrift is competitive in this market, but does not give us the same cost advantage that we normally would benefit from in being vertically integrated as you do when you see needle coke prices kind of more in the mid-cycle type levels or even the high end of the ranges that Jeremy was speaking to earlier.
Abraham Landa: That’s very helpful. And then maybe my last question, this is kind of a follow-up question from an earlier one. You kind of mentioned increased competition with the US. Is that primarily coming from like your traditional Tier 1 Japanese competitors? Or is it coming from kind of these other Chinese or Indian. Like I know, one of the Indian competitors just added 20,000 tons of capacity. Just kind of more color on the competition.
Tim Flanagan: Yes. So that 20,000 tons came on at the end of last year. But the competition really is from those Tier 1 competitors, right? I mean, again, the US, tends to be the strongest market out there, and you are seeing everybody fight for volumes in that market.
Abraham Landa : Thank you very much for that color. Appreciate it.
Operator: Your next question comes from the line of Kirk Ludtke from Imperial Capital. Please go ahead.
Kirk Ludtke: Hello, Tim, Jeremy, Catherine, Mike thanks for the call. Just a couple of follow-ups. This came up earlier. I was curious, could you expand on the pending trade restrictions, anything on the regulatory front that we might want to keep an eye on?
Tim Flanagan: Yes. So just as a recap, right, you’ve got trade protections right now in the EU against both Indian and Chinese electrodes. You have trade protection in the US against Chinese imports. And then I think all of those cases are pretty stable. I don’t think any of them are coming up for renewal or rejudgment here anytime in the near future. I think there was just an announced trade case in Japan against Chinese electrodes. So I think everybody is starting to take note of what the Chinese are doing in the market. Outside of that, I don’t think there’s anything pending that I can comment on right now.
Kirk Ludtke: Okay. I appreciate that. With respect to the monetization of the battery opportunity you reiterated, I think, 2026. When would you have to make a decision in terms of your capacity at Seadrift in order to participate on that kind of time line?
Tim Flanagan: Yes. Jeremy, do you want to talk the construction time line and then we can come back to when we have to start making decisions?
Jeremy Halford: Yes. So the — we would expect the permit to come through sometime in the third quarter of this year is kind of our expectation right now on that. And then once we make a decision on an investment, we are probably looking at a time-line of somewhere around 18 months, I would guess, for construction assuming that all the permitting is in place and we’re in good shape.
Tim Flanagan: And in terms of broader strategic time line and decision-making, it really depends on where we go with the process, right? Our ability right now, I just commented previously about Seadrift not running at capacity. If we just wanted to sell more needle coke into the market, we could do that and make that decision here today. Obviously, the further you go into the supply chain and the fully developing of an anode plant. That obviously will take a longer lead time just given the construction window that Jeremy pointed and also the capital requirements of that. So it really depends on where ultimately we land in terms of our position in the full value chain.
Kirk Ludtke: Got it. Thank you. And then lastly, have you recovered — I know market share is a bit of a moving target, but do you feel as though you’ve recovered the share you lost pursuant to Monterrey?
Tim Flanagan: Yes. I mean I think we talked a little bit about this at year-end, right? We’re rolling off an environment where we’re highly contracted, obviously we had the challenges that were caused by the shutdown of Monterrey. And we are doing all of this during a very challenging demand environment broadly from a market standpoint. So I think we made good progress in the commercial cycle that we concluded in the third and fourth quarter of ’23, and we’ll continue to work through it, but we’re not going to get it all back just in one fell swoop. So we think we’re headed in the right direction and making progress. But you don’t recover from everything just in one bidding cycle.
Kirk Ludtke: Got it. Would you say that you’re tracking on that front in line with expectations?
Tim Flanagan: Very much so, yes.
Kirk Ludtke: Thank you very much.
Operator: This concludes our question-and-answer session. I will now hand the call back over to Mr. Flanagan for closing comments. Please go ahead.
Tim Flanagan: Thanks, Constantine. With that, I’d like to thank everyone on this call for your interest in GrafTech, and we look forward to speaking with you again next quarter. Have a great day.
Operator: Ladies and gentlemen, this concludes today’s conference call. Thank you for your participation, and you may now disconnect.
