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1/24/21 7:46PM
Re: Re: Re: Needle Coke
70
are you sure Graftech doesn't sell any graphite to lithium-ion battery makers? I haven't spoke with company yet, but I was under the impression that they were selling synthetic graphite to batter makers.
I think its important to understand that the in house needle coke will benefit with the supply tightness of needlecoke that is likely to come from growing ev production (I want to say its about... login to read the rest
sorry for the slow reply. i think you are misunderstanding where needle coke sits in the graphite electode manufacturing process. Graftech uses needle coke, 1:1, to produce graphite electrodes - theres no excess needle coke... login to read the rest
2Q results were fine, really nothing to say. Third party needle coke keeps going up - this is not news, all the other players have been suffering - and while EAF saw a slight drag... login to read the rest
you're right i was extrapolating from my own melancholia - you were speaking specifically about Brookfield's actions, and I think you're right, there's a non-zero chance the sale doesn't go aheas down here. or if... login to read the rest
i wish i was as neutral on this as katana. honestly i have been doing a fair amount of soul-searching on how this investment has played out, and this last selldown by Brookfield has got... login to read the rest
Re: 34k tons of new LT contracts entered at a 20% higher price
58
thanks katana. just a couple of quick hits post the Q4 call:
- the tone is definitely changing and management (to me) is clearly presaging a lower price environment in the future. at the same time... login to read the rest
would you care to share your math on that valuation methodology? it all depends what your view of normalized earnings power is, of course - you can clearly get less than $20 if you think... login to read the rest
Also the points about special dividend etc misses the point. If you add contracted cash flow + 5 years of bullish price assumptions and a normalized terminal value, you can't get to $20+. A special dividend... login to read the rest
Indian UHP prices are down 10-13% QoQ. It's possible that this is temporary destocking (because 2018 was a re-stocking year) but highly doubt it. If Indian players don't get the right price from domestic steel... login to read the rest
prices of most all other commodities have been going down on macro/China weakness, etc, but news out the other day confirms graphite prices are still very firm (at the contract level). One of the Japanese... login to read the rest
right there with you katana, but at this rate i think me and you will be the last ones left owning this, sitting in a room crying into our beers (while Brookfield looks on and
EAF will pay out a near 5% special div (basically the bulk of last Qs FCF). in other words the co will have returned nigh on 10% of the market cap in the 7mos or... login to read the rest
hey katana - i think that actually supports my point: he gave the impression demand is part of the issue, even though in reality it is all about needle coke supply. i think he is... login to read the rest
helopilot - thanks for sharing an interesting theory. a couple of pushbacks:
- not sure P66 would be so eager to say no to a long-term contract at $3k or so vs spot sales at $4.5k.... login to read the rest
I think the call went poorly and given how management answered various questions. There are three things that raised flags for me:
1) They were evasive on GE spot pricing (already mentioned)
2) They changed their tune... login to read the rest
jso, i tend to think this is a very JV management team (at least the CEO gave that impression today, it was not a good performance). the excuse mentioned was that they had next to... login to read the rest
They mentioned spot needle coke prices and historically they've always mentioned spot GE prices - but this call they said they couldn't comment on them (not enough data or something along those lines). Do you
EAF reported strong earnings but the stock is now -10% after some rather cryptic comments on the call. One of the big issues for EAF is whether or not they would be able to restart... login to read the rest
Thanks both for the reply. Yea I understand the difference between needle coke and grahite. Let me clarify my point - if the thesis is demand for EV application (anodes, which mostly uses synthetic graphite)... login to read the rest
graftech does not sell, or export, any of its needle coke, either to China or elsewhere; it consumes it all internally (to make graphite electrodes). needle coke for EV anodes need to be sourced outside... login to read the rest
Thanks. But the quality issue is mostly about the electric arc furnaces - namely the steel market. I think Katana's thesis is more about anodes for EV applications. Presumably the quality requirements are quite different?... login to read the rest
there has been much discussion on this board as to whether chinese electrodes actually compete with Graftech's product (see comments 5, 10, 14, 17). As reiterated elsewhere, most all Chinese electrodes are not 'UHP' (ultra... login to read the rest
There are 318k metric tons of anode capacity globally. 225k tons are located in China. Almost the entire supply chain is located in Asia. Do Asian manufacturers source from Graftech, or they source from local... login to read the rest
2Q earnings didn't really bring any new info. there is no change to the thesis - the market is still at max utilization and EAF is making 60%+ EBITDA margins despite selling at half of... login to read the rest
apparently the US is considering additional 10% tariffs on graphite, uranium, and lithium, from China. since the major bear pushback against the maintenance of super-normal profits in the GE industry is a wave of new... login to read the rest
thanks for the kind words katana - appreciated especially as this got a pretty low rating for what I thought was the best risk/reward I had seen in a long time.
agree with most of what... login to read the rest
this has been public 1month and has rallied 25% since IPO price. I am not taking a victory lap since I clearly thought it would price higher and that the IPO price was ridiculous. Since... login to read the rest
thanks for the additive hindsight comments. i didnt forget - i had a view that the industry is much less cyclical now than previously, for reasons i explained at length in the writeup and comments.... login to read the rest
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