GrafTech International Ltd.

Good morning. My name is Thea, and I will be the conference operator today. At this time, I would like to welcome everyone to the Graf Tech third quarter 2021 earnings conference call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star and the number one on your telephone keypad. To withdraw the question, press the pound key. Thank you. At this time, I would like to turn the conference over to Adam Dybul. Please go ahead, sir.

Thank you, Thea. Good morning and welcome to Graf Tech International's third quarter 2021 conference call. On with me today is Dave Rintoul, Graf Tech's Chief Executive Officer, Quinn Coburn, Chief Financial Officer, and Jeremy Halford, Chief Operating Officer. Dave will begin with a review of our safety performance, current industry conditions, and our demand and production levels. Jeremy will discuss operational matters and give an update on our ESG initiatives. Quinn will cover financial details, and Dave will close with final remarks and open the call to questions. Turning to our first slide. As a reminder, some of the matters discussed on this call may include forward-looking statements regarding, among other things, results, 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 Dave.

Thank you, Adam. Good morning, everyone, and thank you for joining our third quarter earnings call. I hope you, your families, and your colleagues are all well. We begin as we always do with safety. Health and safety excellence is a core value of Graf Tech and a fundamental element of our success. Our year-to-date total recordable injury rate is 0.47 through the end of the third quarter, continuing our meaningful improvement over the last few years and tracking ahead of our record low from 2020. Thank you to everyone on the Gravtech team for your continued focus and vigilance on health and safety. Our ultimate goal is zero injuries and every employee going home safely every day. Before moving on, I'd like to take a moment to discuss our recently announced CFO succession plan. As previously announced, Quinn recently informed us of his intention to retire next year. We were fortunate to identify a great replacement in Tim Flanagan, who has over two decades of experience in senior financial positions, including that as chief financial officer of a significant supplier to the steel industry. Quinn will be staying on through our annual meeting in May to ensure a seamless transition. I'd like to thank Quinn for his 11 years of service and leadership. I look forward to working alongside Tim and continuing the progress that we've made over the last number of years during Quinn's tenure. Now turning to slide four, I'll provide some comments on the market. Conditions in the steel industry continue to improve during the third quarter, gaining in both pricing and capacity utilization rates. Most types of steel continue to be priced at or near all-time highs as a result of solid demand. U.S. hot-road coil pricing remains at record levels. The global steel manufacturing utilization rate outside of China was 74% in the third quarter of 2021, consistent with 75% in the second quarter of this year, and a 15% improvement compared to the third quarter of 2020. The U.S. steel industry utilization rate improved to 85% in the third quarter, from 82% in the second quarter of 2021, and compared to 65% in the prior year quarter. The global steel industry's high utilization rates are driving strong demand and increased pricing for graphite electrodes. We are also seeing rising market prices for petroleum needle coke. We expect these trends to support significantly higher graphite electrode prices in 2022. While the steel industry demand has recovered and we expect strong demand for graphite electrodes to continue, Like many industries, the graphite electrode industry is being impacted by global supply chain challenges and inflationary pressures. As a result of these conditions, we are seeing rising prices for freight. Costs for electricity and natural gas are also rising, particularly in our European locations. In addition, prices for raw materials used in the production of graphite electrodes are also rising. As we look forward, we feel confident and our ability to manage through this inflationary environment. Turning to slide five on the commercial outlook. As market conditions continue to strengthen and stabilize, demand for our products has improved. Providing superior services and solutions to our customers is of even greater importance during these times given the tight supply side conditions and rising demand. Our commercial team is well positioned and focused on servicing our clients, and delivering products to meet market demand. A key indicator for the continued momentum in the market is the rising prices for graphite electrodes. Our non-LTA price rose 12% in the third quarter of 2021 compared to the second quarter. We expect our fourth quarter non-LTA prices to increase an additional 7% to 9% over the third quarter. We expect larger price increases to come in 2022, which I'll address in more detail later in the call. We have slightly increased our 2021 estimates for graphite electrode sales under our LTAs and have left the balance unchanged, reflecting our confident outlook that the industry remains healthy and is driving demand for our products. Now turning to slide six. We are pleased with the continuous strength we experienced in the third quarter with our sales volume. Sales volumes of graphite electrodes remain robust at 43,000 metric tons in the third quarter, up 30% compared to the third quarter of last year. Our third quarter shipments were comprised of 28,000 metric tons of graphite electrodes under our LTAs at an average approximate price of $9,500 per metric ton. and 15,000 metric tons of non-LTA sales at an average approximate price of $4,600 per metric ton. To provide further insight, the reported quarterly non-LTA price reflects a mix of annual agreements negotiated in the fourth quarter of 2020, quarterly agreements negotiated earlier in 2021, as well as spot agreements. Our non-LTA pricing has steadily improved through the year, and we expect these trends to continue for the remainder of this year and into 2022. By volume, more than three quarters of our non-LTA sales were prices agreed to under annual and quarterly agreements at a time when graphite electrode prices were lower than they are currently. This then means that less than one quarter of the Q3 non-LTA business was at spot. Lastly, net sales in the third quarter increased 21% compared to the third quarter of 2020 to $347 million. Now I'll turn the call over to Jeremy to discuss operating items and our ESG progress over the past quarter.