S&P cuts GrafTech

S&P said it lowered its ratings on GrafTech International Ltd. to B+ from BB- and its senior unsecured notes to BB- from BB.

The forecast graphite electrodes is softer, which means GrafTech’s debt to EBITDA will remain elevated in 2024. The agency said it projects EBITDA for 2023 to drop to $30 million

“We also anticipate a slower recovery in GrafTech's end markets to potentially keep leverage above 7x in 2024. Soft steel production is lowering electrode demand and depressing pricing, particularly in Europe where high energy costs and weak industrial demand continue to weigh on steel output. Simultaneously, lower electric arc furnace steel production in China is increasing electrode exports, putting further pressure on graphite electrode pricing,” S&P said in a press release.

The outlook is negative.

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