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  • RBC Capital analyst Arun Viswanathan downgraded GrafTech International Ltd EAF to Sector Perform from Outperform and lowered the price target to $7 (an upside of 9%) from $10.
  • The analyst states that the downgrade reflects cost/demand headwinds and lower average realized price for LTAs in the ~$7K range (from ~$9K).
  • Viswanathan mentions that given the current macro enlivenment and HRC steel prices, he sees no need for EAF’s customers to lock in LTAs and/ or to lock in LTAs at prices significantly above current spot levels.
  • The analyst expects demand to wane for electrodes and electric arc furnace steel.
  • He also sees macro headwinds diminishing electrode demand and the elevated risk of a recession, especially in Europe, which should result in a cyclical downturn in construction and the need for steel.
  • Price Action: EAF shares are trading lower by 5.52% at $6.41 on the last check Wednesday.

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