Bennett Moore

Bennett Moore asked how the lower expected CapEx spend in 2026 might directionally impact the company's appetite for share buybacks. He also questioned the increase in SG&A per ton in Q4 2025 despite record shipments, asking if incentive compensation was a factor, and what the trend for this metric is expected to be for Q1 2026 and the rest of the year.

Answer

CEO Karla Lewis stated that the lower CapEx budget for 2026 does not significantly change the company's consistent appetite for acquisitions, organic growth, share buybacks, and dividends, as financial strength supports all. She noted the budget is right-sized but open to increases for profitable opportunities. CFO Arthur Ajemyan explained that while SG&A per ton was down ~1% for the full year 2025 due to leveraging the cost structure, the Q4 increase was primarily due to higher incentive compensation linked to a 28% year-over-year increase in FIFO profits. He reiterated the focus on leveraging the cost structure despite inflationary pressures.

Bennett Moore asked how the lower expected CapEx spend in 2026 might directionally impact Reliance's appetite for share buybacks, notwithstanding the recent dividend hike. He also inquired about the SG&A per ton metric, specifically why it was up in Q4 despite record shipments (e.g., incentive compensation), expectations for Q1 2026, and confidence in it trending lower for the balance of the year.

Answer

Karla Lewis, President and CEO, stated that the lower CapEx budget for 2026 does not significantly change Reliance's consistent appetite for acquisitions, organic growth, share buybacks, and dividend increases, as the company possesses the financial strength for all. She noted that while the 2026 CapEx budget is lower after outsized spending in prior years, it is right-sized, and the company is open to increasing it for solid customer opportunities. Arthur Ajemyan, SVP and CFO, explained that SG&A per ton was down approximately 1% for the full year 2025, demonstrating cost structure leverage. He attributed the Q4 increase to higher incentive compensation linked to a nearly 28% rise in FIFO profits, emphasizing that leveraging the cost structure through profitable growth remains a key focus despite annual inflationary pressures.

Bennett Moore from JPMorgan Chase & Co. followed up on the aerospace inventory comment, asking if restocking could emerge in Q1 2026 and if there were differences between aluminum and stainless. He also sought details on the puts and takes behind the steady pricing guidance, including flat steel, plate, structural, and Midwest premium. Lastly, he asked for an update on the M&A landscape and valuations.

Answer

Karla Lewis, CEO and President, clarified that Steve Cook's restocking comment referred to Reliance Inc.'s internal inventory position for specialty alloy steels, titanium, and specialty aluminum, not all aerospace products. She noted steady activity in common alloy aluminum. Steve Cook, COO, highlighted extended lead times and strong demand for wide flange beams, appreciation for recent plate price increases, and expected upticks in merchant bar and carbon products. Karla Lewis added that the M&A market is seeing a steady flow of opportunities with generally reasonable valuations.

Bennett Moore followed up on aerospace inventory, asking if restocking could emerge in Q1 2026 and if there's a difference between aluminum and stainless, sought clarification on the steady pricing guidance for Q4, particularly regarding flat steel, plate, structural, and Midwest premium, and inquired about the current M&A landscape, valuations, and new opportunities.

Answer

Karla Lewis, President and CEO, and Steve Cook, Executive Vice President and COO, clarified that Steve's aerospace comment referred to Reliance's internal inventory position for specialty long products, not all aerospace products, noting steady activity in aluminum plate. They acknowledged positive signs for carbon products like plate and structural steel, with lead times extending and price increases taking hold, and noted common alloy aluminum prices were up in Q3. Karla Lewis described the M&A environment as having a steady flow of opportunities with generally reasonable valuations, and Reliance continues to actively evaluate them.

Bennett Moore from JPMorgan Chase & Co. asked for further details on the slowing of the mill ramp-up and changes in sequencing at Detour Lake, including implications for costs and CapEx in the coming years before the growth trajectory into the next decade. He also sought a better understanding of the opportunity at Meadowbank beyond 2030, specifically regarding an underground-only mine and its potential scale.

Answer

EVP and COO Natasha Vaz explained that the Detour Lake mill reached a record 28 million tons in 2025, and the revised timeline to 29 million tons by 2030 allows for stabilization and sustainable operating practices, with no significant change to the 1 million ounce production target in the early 2030s. President and CEO Ammar Al-Joundi added that the focus is on ensuring recovery and reliability. VP of Exploration Guy Gosselin stated that the Meadowbank team is conceptually targeting 250,000 ounces per year from deeper underground and smaller pushbacks, with the $5,000 gold price making these higher-cost, low-risk ounces attractive, and further updates expected not before 2027.

Bennett Moore inquired about the slowing of the mill ramp-up and changes in sequencing at Detour Lake, including implications for costs and CapEx, and sought a better understanding of the Meadowbank life extension opportunity beyond 2030, particularly for an underground-only mine.

Answer

Natasha Vaz, EVP and COO on Ontario, Australia, and Mexico, explained that the Detour Lake mill reached a record 28 million tons in 2025, and the revised timeline aims to stabilize throughput and embed sustainable operating practices, targeting 29 million tons by 2030. Ammar Al-Joundi, President and CEO, added that the focus is on ensuring recovery and reliability. Guy Gosselin, VP of Exploration, mentioned that the Meadowbank team is conceptually targeting 250,000 ounces per year for a potential underground extension beyond 2030, leveraging existing infrastructure with minimal CapEx.

Bennett Moore with JPMorgan Chase & Co. inquired about the worsening dynamics of aggressive competitor pricing, particularly in the U.S., and whether it's driven by imports or local players. He also asked if GrafTech anticipates directionally lower realized pricing in 2026.

Answer

CEO Timothy Flanagan stated that pricing pressure is global, not specific to a region, and is problematic given the indispensable nature of electrodes and the asset-intensive business. He noted that imports from China and India at low prices are certainly problematic, but trade protections are being put in place in the U.S. and Europe. Flanagan confirmed that absolute pricing observed for 2026 is not better than 2025 levels.

Bennett Moore from JPMorgan Chase & Co. inquired about the worsening dynamics of aggressive competitor pricing, particularly in the U.S., and whether it was driven by imports or local players. He also asked if GrafTech International expects realized pricing in 2026 to be directionally lower, given improving demand expectations offset by excess supply and competitive pricing, despite 65% of the U.S. order book being locked in.

Answer

Timothy Flanagan, CEO of GrafTech International, explained that pricing pressure is global, not specific to a region, and driven by the amount of material, particularly from China and India, being dumped into the market at low prices. He noted that current pricing does not reflect the asset-intensive nature of the business or incentivize R&D. Regarding 2026 pricing, Mr. Flanagan indicated that absolute pricing observed thus far is not better than 2025 levels, without providing specific guidance.

Bennett Moore from JPMorgan Chase & Co. asked about the impact of the 50% tariffs on Indian graphite electrode material on U.S. imports and whether these tariffs could drive share gains or influence 2026 commercial commitments. He also inquired about any new engagements GrafTech has had regarding public-private partnerships or government financial support for the graphite industry since the previous quarter.

Answer

CEO Tim Flanagan stated confidence in continued U.S. market share gains, attributing it to GrafTech's value proposition and technical services, and noted that the Indian tariffs present an opportunity in negotiations. He editorialized on overbuilt capacity in India and China, emphasizing the justification for tariffs. Regarding public-private partnerships, Mr. Flanagan highlighted the importance of critical minerals and trade policy for a strong domestic industrial base, particularly for EAF steelmaking. He positioned GrafTech as uniquely suited to play a critical role in supporting the domestic supply chain due to its history, innovation, and vertical integration, confirming ongoing advocacy efforts without providing specific new engagement details.

Bennett Moore asked about the impact of the 50% tariffs on Indian graphite electrode material imports into the U.S. on market dynamics and 2026 commitments, and whether GrafTech has engaged in new public-private partnerships or received government support for the graphite industry since the last quarter.

Answer

CEO Tim Flanagan expressed confidence that the Indian tariffs present an opportunity for GrafTech to gain market share in the U.S., supporting negotiations for 2026 commitments. He noted that Indian and Chinese producers have significantly overbuilt capacity and lowered prices, justifying the tariffs. Regarding public-private partnerships, Mr. Flanagan emphasized the government's focus on critical minerals and trade policy to promote a domestic industrial base, particularly for steelmaking and its supply chains. He highlighted GrafTech's unique position as a vertically integrated industry leader and its ongoing advocacy efforts, but declined to comment further on specific new engagements.

Bennett Moore from JPMorgan Chase & Co. inquired about GrafTech's U.S. market share, which is over 50% of revenue, and the potential for further gains, as well as the impact of Chinese anti-dumping duties on needle coke and electrode pricing.

Answer

CEO Timothy Flanagan confirmed the company's strong position in the Americas and its intent to continue growing share in the robust U.S. market. Both Flanagan and COO Jeremy Halford characterized the anode opportunity, spurred by tariffs, as a medium-to-long-term positive for the needle coke market that supports building a Western supply chain but does not have an immediate pricing impact.

Bennett Moore asked about the impact of U.S. tariffs on Indian graphite electrode imports on pricing pressure and questioned how much room for market share growth remains in the U.S. after recent gains.

Answer

CEO Timothy Flanagan responded that the tariffs on Indian imports could be a "landscape changer" for the U.S. market, creating a significant opportunity for GrafTech. He added that while the company has regained share, there is still considerable room to grow, especially with the introduction of the 800-millimeter product and the potential for overall market expansion from tariffs or organic growth.

Bennett Moore from JPMorgan inquired about customer feedback on the announced 15% price increase, when it might impact results, and the current pricing for petroleum needle coke.

Answer

CEO Timothy Flanagan clarified the price hike is 15% (not 50%) and is a necessary step to restore profitability, representing a minor cost increase for steel producers. He noted that early customer feedback has been understanding. The increase will apply to uncommitted volumes, with effects likely starting in Q2 2025, as many U.S. contracts are annual. COO Jeremy Halford added that super premium needle coke pricing remains stable in the $1,000 to $1,300 per metric ton range.

Bennett Moore asked about the dialogue with the Mali government since regaining control, the current state of the assets, and any incremental investment required. He also inquired about Barrick's latest thoughts on a potential asset sale in Mali, now that employees are no longer detained.

Answer

Graham Shuttleworth, Senior EVP and CFO, reported that the relationship with the Mali government is at a positive reset, and the Loulo-Gounkoto asset was in better shape than expected. He noted that all three underground mines have started, and the open pit is ramping up, aiming for historical run rates by year-end, with 2026 guidance of 260,000-290,000 attributable ounces. Shuttleworth stated that the current focus is on ramping up the mine and restoring the relationship, not on an asset sale.

Bennett Moore inquired about the current dialogue with the Mali government since Barrick regained control, the condition of the assets, any required incremental investment, and the latest thoughts on a potential asset sale in Mali, including interest from other parties.

Answer

Graham Shuttleworth, Senior EVP and CFO, reported a positive reset in the relationship with Mali. He noted that the Loulo-Gounkoto asset was in better condition than expected, with all three underground mines now operational and the open pit ramping up for the second half of the year, aiming for historical run rates by year-end. The 2026 guidance for Loulo-Gounkoto is 260,000-290,000 attributable ounces. Shuttleworth stated that the current focus is on ramping up the mine and restoring relationships, not on an asset sale.

Bennett Moore asked about the sales trends for engine and fastener sub-markets during the quarter and year-over-year, and how lead times for structural products compare to engine alloys. He also inquired about the lumpiness and adoption trends in the additive business, its margin profile, and future growth potential.

Answer

Tony Thene, Chairman and CEO, reported that overall aerospace sales were relatively flat sequentially due to operating days and holidays, with engine sales down slightly and fastener sales up marginally, but all sub-markets were up substantially year-over-year. He confirmed that lead times have extended across all aerospace areas. Thene stated that structural alloy lead times are generally shorter than engine alloys. He described additive business growth as driven by higher adoption and increased activity with large customers using proprietary alloys, viewing it as a future tailwind with continued growth potential.

Bennett Moore asked about the sales trends for engine and fastener sub-markets during the quarter and year-over-year, lead times for structural products relative to engine alloys, and the nature and future potential of the additive business.

Answer

CEO Tony Thene reported that overall aerospace sales were relatively flat sequentially due to operating days and holidays, with engine sales down slightly and fastener sales up marginally, but all sub-markets were up substantially year-over-year. He confirmed that lead times have extended across aerospace and are expected to return to previous high levels, with structural alloy lead times generally shorter than engine alloys. Thene noted strong adoption and increased activity in the additive business, which, though small, is expected to see continued growth and is performing well.

Bennett Moore asked for a breakdown of the sequential Aerospace & Defense (A&D) bookings growth between engine and structural submarkets, aiming to understand the extent to which Boeing-levered customers are increasing orders. He also inquired about any changes to prior assumptions for fiscal 2026 guidance regarding the resumption of structural activity and whether incremental value realized in LTA renewals is accelerating or similar to initial post-COVID repricing.

Answer

Chairman and CEO Tony Thene declined to provide specific bookings breakdowns for submarkets but emphasized that the overall 23% sequential A&D bookings growth was volume-driven. He stated that the fiscal 2026 guidance remains unchanged, but increased customer positivity and market insights provide line of sight to the high end of the range. Thene noted that LTA renewal percentages continue to increase, though the exact acceleration varies by submarket.

Bennett Moore asked for a breakdown of the A&D bookings growth between engines and structural, the underlying assumptions for the fiscal year 2026 guidance revision, and whether incremental value realization in LTA renewals is accelerating.

Answer

Tony Thene, Chairman and CEO, declined to provide a submarket breakdown for bookings but emphasized that the overall A&D growth was volume-driven, not just price. He explained that the confidence in the high end of fiscal year 2026 guidance is based on increased positivity from customers and market insights. Thene noted that while LTA renewals show continued percentage increases, the acceleration varies by submarket.

Bennett Moore from JPMorgan Chase & Co. asked about the potential for further product mix improvements in fiscal 2026 and whether to assume that SAO segment volumes would trend higher, particularly in the second half of the year.

Answer

President and CEO Tony Thene stated that he expects the product mix to continue to strengthen, driven by strong demand in the high-margin Aerospace, Medical, and Power Generation markets, which now account for over 80% of the business. He clarified that while volumes in these key markets will increase, the primary focus is on driving profitability, not overall shipment volume, as lower-margin product volumes may not see the same emphasis.

Bennett Moore asked for color on why SAO volumes were flat despite more shipping days, whether there were order deferrals in lower-margin markets, and if the equipment for the brownfield expansion would face tariffs.

Answer

CEO Tony Thene explained that the company optimizes for profitability, not volume, shifting capacity to higher-value products, which can result in lower volumes but higher revenue. He expects volumes to increase in coming quarters as OEM production ramps. Thene noted that lower-margin markets are not material, with aerospace, medical, and IGT comprising nearly 80% of revenue. CFO Tim Lain confirmed that some specialized European equipment for the brownfield project will likely face tariffs, but this is a small part of the total project cost and is a moving target.

Bennett Moore of JPMorgan Chase & Co. inquired if there's a level at which Carpenter would cap its A&D and Medical mix and whether the shift to these products could keep shipment volumes flat. He also asked for more color on the Energy market's performance and the impact of AI-related demand.

Answer

CEO Tony Thene reiterated that the company's goal is to maximize profitability, not volume, by shifting away from high-tonnage, low-margin products. He explained that this strategy can lead to volume changes that don't correlate with profit growth. On Energy, he described the power generation submarket as a valuable, high-margin business that provides flexibility to fill production gaps. He noted that demand was already strong before the AI data center boom, which has added another level of demand.

Bennett Moore of JPMorgan Chase & Co. asked for details on operational improvements at the Muscle Shoals facility, the ability to pivot capacity to packaging, the outlook for the European auto business, and the expected impact of scrap spreads in the second half of the year.

Answer

CEO Jean-Marc Germain explained that Muscle Shoals' performance has stabilized due to better manning and maintenance, and weak auto demand allows for more mill time for the healthy packaging market. He noted no current engagement with Chinese OEMs in Europe. Regarding scrap, he confirmed that wider spreads are now beneficial and this positive impact is factored into the revised guidance, with scrap flows from Europe to the U.S. being immaterial.

Bennett Moore of JPMorgan asked about the reaction from the union and workforce to the San Ciprián MOU and sought an update on the permitting timeline for mining operations in Western Australia.

Answer

President and CEO William Oplinger reported that communication with employees about the MOU has been balanced, stressing that a smelter restart is not yet guaranteed. EVP and CFO Molly Beerman updated on Western Australia, expecting a public comment period to start late Q1 2025, which keeps the project on track for final approvals in 2026 and access to upgraded bauxite no earlier than 2027.

Speaking for Bill Peterson, Bennett Moore asked for context on the types of parties interested in acquiring San Ciprián and for thoughts on the marginal cost support for Chinese alumina refineries.

Answer

President and CEO William Oplinger stated that interest in San Ciprián came from a wide range of 'financial and strategics and nontraditional' parties. He also estimated that the current marginal cost of alumina production, both within and outside of China, is approximately $400 per ton, depending on specific input costs and currencies.

Bennett Moore, on behalf of Bill Peterson at JPMorgan Chase & Co., asked about the mix of spot versus contract sales in Q3 and its impact on pricing, as well as the expected timing and potential barriers for Carolina Lithium's air and water permits.

Answer

CFO Michael White confirmed Q3 included spot sales and that the strong realized price was achieved by leveraging a trading partner to benefit from market contango, rather than direct hedging. He noted 2025 sales will be primarily to long-term contract customers. President and CEO Keith Phillips stated the Carolina permits are progressing well, with an expected completion in the first half of 2025, after which the company would proceed with the local rezoning process.

Bennett Moore, on for Bill Peterson, requested updates on smaller discretionary projects, including the Lone Star stacking expansion, Atlantic Copper recycling, and Grasberg mill improvements, and also asked about progress on cleanup work at Grasberg.

Answer

President and CEO Kathleen Quirk provided updates, stating the Lone Star oxide project will be completed in 2025, the Grasberg copper cleaner will be commissioned in Q4 2024, and the Atlantic Copper recycling project is on track for production late next year. She also confirmed that operations at Grasberg are proceeding very well, with the team exceeding its Q3 forecast for tonnes milled and achieving strong grades.