The ratings on GrafTech International Ltd. reflect the company's significant exposure to the cyclical steel industry, limited supplier diversity, and continued raw-material cost pressure. Still, the company maintains a good market position in graphite electrodes, has healthy margins driven by current favorable industry conditions, and has a good liquidity position. GrafTech manufactures carbon-based materials for use in various applications. Its primary product, graphite electrodes, accounts for about 80% of its sales. Following the sale of its cathodes business, the company derives its sales from advanced synthetic graphite products and thermal interface products. Because graphite electrodes are primarily used in electric arc steel furnaces, the company is exposed to the cyclical steel industry, which can result in volatile performance and cash
