Nucor (NUE) 24 Oct 232023 Q3 Earnings call transcript

Good morning, and welcome to Nucor's Third Quarter 2023 Conference call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Jack Sullivan, General Manager, Investor Relations. Please go ahead.

Thank you, and good morning, everyone. Welcome to Nucor's Third Quarter 2023 Earnings Review and Business Update. is Laxton, Chair, CFO. Executive today along and call Steve with Vice our Leon President Topalian, CEO; Leading President and

Talent also Corporate and Noah Rex Operating safe of including members laws. Actual a materials call. earnings results products. and Brad Doug for and information will have Jellison, during of team Fabricated our Structural Strategy; Materials; and financial the and Nucor's non-GAAP different General We risks Query, Dan of us, Nucor's Construction John them and securities fabrication; disclosures, over disclosed discussion with includes Business Bar Products; Plate posted Nucor's and Sustainability Dave Greg New Rebar Raw Al portions Today's Services, measures involve release Utermark, Officer; may Commercial, measures. executive Counsel; in Needham, as within we use Sheet to financial be We and of access Chief website. filings. with Ford IR of appendix innovation. We've the cover presentation along presentation Behr, of Hanners, responsible Sumoski, Markets other Resources; meaning Chad include harbor Murphy, and and investor encourage quarter will third the and in you supplemental information non-GAAP forward-looking today's these statement reconciliation SEC to The our outlined Hollatz,

to turn over the Leon. let's So call that, with

the safely. shareholders investments new generating Thanks, making our by Nucor team the core returns XX,XXX markets like our months to first through operate our Jack, highlighting the continues into year, for begin strong and expand we're welcome, and team efficiently everyone. performance the of our are grow I'd of tremendous and to to and call members today's X

every on our proof Nucor day. performance, In and performance year who culture pace team members live record the fifth consecutive of our our to further of each we're deliver world-class fact, safety by

go, earnings per Looking at net billion quarter, Even per still share. $X.XX or This EBITDA Nucor our in billion to third full earnings billion brings September earnings quarter $XX.XX year-to-date year and our keeping or approximately the second through QX, generated in history. In we diluted though financial our best performance share. diluted strategy, $XXX have shareholders $X.X year-to-date for investor-focused with capital net represents $X.X of $X.X our representing our million of to in Nucor's already quarter. the more XX% X we've returned net earnings to allocation our

was branded $X.X compared product national campaign nearly On customers our were Made the shipments to X.X launched this Good, tons QX X% Earlier commitment operations customers approximately for million shipments highlights most reduce was quarter lead outside roughly producing a our and to downstream to month, X% million in to sustainability our to that X.X million, the we steel emissions. adopt down steel and the efforts front, down of quarter and industry practices prior others world's for which tons. sustainable total the to shipments to XXXX. Total mill outside steel compared

their us even sustainability. emissions not just We're but gives more further. differentiate steps a process competitive recycling-based about as look to ourselves reduce circular to supply Our in advantage talking customers taking are we chain,

the behind identify additional with paint of galvanizing our we've global with Steel iron set Last to in generation West Nucor every in for are all that partners with new mill. introduced past in for a those sheet enable and and risk-adjusted offshore mills accelerate coalition tube technologies shareholders. I'd milestones We PPA, a higher-value highlight of zero-carbon forming investments the sheet industrial each lead the hit steel We opportunities our higher-margin a and month Virginia, year, for value-added construction wind joined another in regard. We've high-quality were facility standard entered role by strategic along week, our produce making, XXXX. for nuclear sheet more power in sheet, bar develop leaders partnership a strategies event DRI in clear steel renewable reminder to and This compelling steel develop of the are to sustainable Mason that broader we needle has other capabilities lines, the adding to capture, Louisiana we the Global a to businesses and a of our formed lower advanced products we from to have Virginia to broader move start done transport capacity forms and emissions. Consistent energy help heavy-gauge energy in to produce sequester of celebrate value into Nucor industry compared industry, Council, hundreds plate And invested in making of important to investments manufacturers. something of we've who plate return future emissions Nucor, Elcyon, like partnerships cleaner especially we and across products almost for sheet. with COX carbon and recently growth. our in companies played unbiased critical our steel a investment XXXX, the will a Climate reinvestment newest X Starting and industry doubled West customers measure rationale of and company's than groundbreaking to report to a carbon make global after in County our a footprint. By have investment. will

capable largest able we plate. positions to products the August, bridges, to grand plate critical ceremony wind, in region the in in military plate-consuming many micro such America, nation's that mill power our of this most our This others. And Turning as the investment Earlier and security areas of specialty celebrated as support for our Kentucky. supplier state-of-the-art North amongst official month, long-span plate we The opening produce regions the and rebar decades. the groundbreaking coming Nucor economy on a us to transmission, will forward equipment applications, This operations. held rebar Brandenburg, in in modernized in at mill up intensity mill will in starting The enable margins us growing construction, new XXXX. making improved this to help demand and lower the look on the is Mid-Atlantic in mill our rebar team capitalize to mill over both Lexington, we Southeast processes for Carolina. growing and and early progress achieve Lexington from great North emissions

of creating grow And steel segments the capabilities are shareholders. has A for expand still level As and customers innings tons we been to along positioned a adding mega goal products. state not some in our The the like unrivaled than all metaphors scale products earnings from X We diversifying order trends fuel are serve are we by clear, and times, It's to various last our and steel to be rebuilding, across trends, and the supportive continuum and and capitalize to few federal these these repowering and To where production and engineering opportunities new on to of use to cross-sell development, I'll early customer indicate X help since baseball diversity, the make in drivers. Investors of permitting of said that. believe about it's a we where I'd is our best our magnitude point. Based meant ultimately growth bidding books, favorably Nucor have our share in it legislation. lot capabilities are reshoring shipped innings process positioned to to many steel playoff we're product steel have baseball the think intended X. federal is said on mega in longer with strategy like growth as is our products. and few manufacturing the the and these plate the mill feels and cycle orders of we're better more my supply. we appropriations, innings U.S. like to already others. intensive on thoughts our season, what and base economy. Nucor's may steel to reflect asking current taking each And been we the project

come, The had plenty biggest on still and somewhere the IRA in feel at with thus Act falls of between. are upside steel-related probably X to our CHIPS progressed all process the the far has with least early impact to the respect like book in order orders. still has we While IIJA

to wave still tailgating bottom of and the first with with respect to the to sheet. Back game probably construction funding neared projects others believe of Nucor deal it processes, a stadium. bridge just The yet transmission bidding out the but are rebar, rebuilding my relates state-level effort, IIJA, As of through permitting beam the a of related analogy. plate require first, great tons and which baseball we've has we the and are has and especially lot plate, to heavy shipped fans power the but it involving some we have make more and started, products, to entering will while highway piling

On under the longer and projects repowering a permits. to IRA energy financial credits edge front, the timing, to occurs still process the through take a but renewable the the tax gives financing allocation the IRA opposed this the and IIJA, slight necessary as probably secure all stimulus under while on storage

as least Act but an take starting will battery yet by of an to X of is and another the projects to manufacturing worth XX wind, already a produce XX% few delivering steel. onshore efforts announcements billion. to still supported an see to $XXX relating it remaining years can of advanced for there's finally, comes we while are plants, estimated promulgated construction steel in facility, come. And required has complete Nucor projects orders to steel CHIPS lot the Nucor several at can shift So including and the EV ground-mounted more these progresses. When semiconductor, from solar years Science a upside products estimated and to and reshoring to product these, the

steel the hits plans built. With what it Steve? like Nucor, additional will for excited Some cases, of intensity to representing that, be hits. plenty we're companion and provide turn profit about margins base U.S. compelling. Needless for are economy the these And our trends QX. quite many for I'd Nucor which Laxton, be but mega mean in and tons home it's now runs outlook leading who to base to over of to supplier can there the the performance QX Steve with details products orders steel the can for say, of higher of represent

Leon, the you net by this and guidance call exceedings The midpoint joining than $X.X consolidated third main billion, you, we thank of earnings this of all morning. performance more With September but about on were power for our business XX%. of our Thank display quarter and driver our notably was of we than several bar model businesses, of many strength again. the steel products yet downstream mills in earnings most Nucor's in divisions. The expected growing from better our exceeded and

both third where of a to net exceeded quarter earnings The group $X generated trailing consecutive basis. With steel and was XX-month earnings third the results, quarter exceeded our quarter, second pretax equity on segment in million the operating $XXX on decrease billion XX% XX% our of from a tenth return mills respect quarter. our

of While most lower volumes declined realized pricing prior the the for from earnings accounted decline. X% quarter, roughly

example, of scrap and an more third As outpacing $XX the a to sheet quarter, roughly in our ton modest ore-based pricing prior metallics. by fell cost quarter realized declines the for compared our

per for our rate This higher cost factor down the at XX% quarter. price in XX%, mills. utilization steel rate the ton was quarter utilization a lower Our from key prior was affecting conversion

quarter. excellent continue approximately our from for see were Steel steel Products $XXX third products We segment. Pretax earnings for million to the results

most our diverse range in this know, the of steel broad produces capabilities. industry, you our of benefiting products As from set we're business and solutions

deck we offset saw products. and rebar like tubular These areas fabrication, and some declines buildings metal panels. quarter, partially from the in stronger insulated metal and joist contributions During pre-engineered

deck continues and historically levels, joist pre-pandemic averages. it well remains moderate While profitability to high above from

a Although construction. lack areas we're nonresidential lingering of seeing with clarity overall growth the there is still within economy, of

allowing Here with us to facilities is on gains again, transportation Nucor's on the and advanced energy manufacturing centers diverse and see product front, data and the buildings range front. infrastructure

both balanced operations generated nearly in Materials recycling months the capital during of for we and $XX saw prior approach the DRI quarter lower realized businesses. quarter. third Compared to the of segment million the with cash quarter, billion produced $X.X shipped Raw This from of the our first pretax our strong year. lower earnings $X.X through enabled allocation. and Nucor Our cash billion X pricing and volumes flow

Our framework the remains for capital same.

and strong Nucor investment-grade sheet, remains expect direct to balance create move to strong level redeploying with balance debt such sheet to of while next total of returning our at also record spending accelerated track liquidity large maintain M&A capital year enabling returns Virginia value capital XXXX, a a support repurchases. $X.X shareholders. with and billion strategy. to than dividends activity. Nucor over of just XX% West or Year-to-date, capital make has a We Nucor's billion has into the net as returned shareholders, This long Since potential shareholders XX% long-term cash shareholders. Nucor period more capital we our meaningful capital back of through of $X.X by has as of provides advancing of around projects, approximately and a returned to to earnings $X.X on and nearly the quarter. billion last mill end share sheet hand

Turning to capital spending.

billion, from our timing Virginia to may the than being initial our Because figures was capital billion delayed. we're delays, anticipated, with in pushed those growth spending particular, recall, XXXX. the you largest $X.X slower of projects but As our reducing spending into between was approximately on estimates West progress several slower XXXX $X and difference of project in

we earnings the X to than third to lower earnings declines we consolidated across the lower prices mills, to results lower slightly At fourth be on segments. quarter, and For realized outlook, our third volumes. expect with the quarter decrease steel expect quarter compared all

in business expected lower expect to our slower are we in later is pricing improve average realized Products contracts, the Steel segment, most of that price recent sheet on improvements Given realized well. selling our and volumes not quarter. In as sold pricing until

Materials fourth our expect to quarter earnings compression at Raw segment, outages the For operations. in planned and we margin due DRI the lower

into with have strong of for data Looking order ahead centers and expected attractively into continued quarter some activity products backlogs second steel manufacturing, we our energy. in priced XXXX, the

potential over Auto geopolitical from concerned Workers secular demand have arising rates, elevated the conditions So term and higher while near-term constructive credit drivers, the risk shutdown. attribute strike, We long another to government remain to we due expected tightening, market interest about softened. uncertainty United U.S. this

you our today, questions fourth we any have. may hear in lines Operator, like Q&A. earnings may you the the of that quarter and expect we'd our to As quarter of from that, sequential third declines exceed decline. With open please answer for

is Gresser first The of question Instructions] from Paribas. [Operator Tristan BNP

The capital the Could M&A. what you first potential touched is inorganic I place you is on growth think strategy remind X of the allocation. on in us

more moment? I roll question. how on think side, upstream? in the you my past, the you current first how flat as market downstream viewed at And the the view you do M&A the That's do but view

question. it's comment took maybe that off as on Yes, about and second half in and if our Tristan, mission grow I'll beyond kick it But ask maybe think we over we the Steve our your of core, the XXXX, culture. to to expand statement started I live when CEO

think highest that core, and And last growing and So mill as or politicians. in of local excited an again, generating and week we couldn't and sheet groundbreaking like those of growth, that in location Carolina incredible about senators really sheet the of with last had it's proximity steels Lexington, in about the backdrops Friday expansions which our be facility, our thrilled couldn't Virginia, against projects like more week of painted team we and again, North on our grades X galvanizing more and projects for that, be galvanized. the cleanliness West

that's So the core.

curve a so because, normal those been a we that businesses, higher low part to the towers are continue consistent piece other business investments the -- about the adjacencies, of so a things and cyclicality is the more Tristan, racking The for higher earnings of think that long. to systems, like of high as warehouse going traditional we've beyond expanding outside profile, pieces our Nucor the structures, again, operate door many overhead and generate in of our our again, steel C.H.I.

that our balancing profile overall for that shareholders. we're again, portfolio, balancing return So

our And so those are priorities.

Do we -- dollars spend projects how are to we're value? As we through, going to about come what and we add looking do that create dollars double percent each x sense? do shareholders you the and drives every make maximize ultimately, value that out up family. XX,XXX Nucor do men our of for is KPI into now culture think are we the with and in is that It our they our every Nucor? amount those benefit broken make what this bring see cultural near Because to the of women fits is result dollar capital Ultimately, closer where we've on cost that bucket, Where economic doing capital. we're who going from. which umbrella drives where

And there. said you Balance is with question a Nucor Tristan, the capital as was the reminder, really allocation. word just might summary only Leon what Leon has -- add the thing the been balance. key to and I used started

with which through question advantage approach you a as take in of shareholders, opportunity have was see number business disciplined years, down some at versus and of enforced consistent walked where our and organic and we create We Leon we examples, inorganic for capital that to do how about returning a look value. back we can reinvesting our your can we

So M&A have an strategy. we inorganic or don't expressly

and by have that to strategy which We is strategy. tool we use a a M&A implement

go clear All quality. potentially of that. at on is grades you and there red a particular quick strip right. a to there asset look side, are That's sense types the certain on up But and certain follow-up to of get helpful. on when upstream interest lines -- M&A, Maybe make

roll market you view one peers think was share? Is that mentioned something the earlier I your of pretty that flat also a fragmented.

is yes. Yes. Tristan, answer the short

about to differentiation, looked. If review the of Nucor's you and you're as what comprehensive variables of and one informs what things strategy. having going in our about team great the M&A much we've And about you materials, again, a do that team all other you XXX another upstream product think are. of and consistently, as not that It

reflective made going of archive. I've that for mega value differentiated really things investments just for They're our we're existing highlighted in to continue in to provide the to proposition opportunities customers. those we've that that the the and pipelines of the look are trends are that So a going

So we and we're thinking really well Nucor about the the sustainability with net mega trends are like again, plant the structures, how carbon steel X of that, is a opportunities positioned. towers that making manufacturing battery data and centers the and iconic build-out EVs, footprint,

above I M&A. the what to our to filtering into the about dollar mentioned thinking cost earnings can and also and And to, profile so what is invested, over every of performance all the long return improve overall our you we an mentioned shareholders well are things of that capital cycle is the the us come our would of opportunity going EV I again, volatility giving create we're through term. is how ultimately, more much for you drivers But consistent just Steve tell of

All right. I And rebar market. if a may on clear. follow-up That's just have very the

and You there's demand just looking are. Basically, of interest terms of in announced being term? for rate a the you some being announced, project sure I medium you're seeing are if with where lot through supply going there. I'm but they're investment what they the know been not

comfortable demand and medium-term balance the rebar supply market you're this seeing on investment? So are type of how with the you make to

Yes, look Tristan, off, we're the exploration comment our to look, that But well. Northwest. into Hollatz, announced bar products John we ask maybe I'll and start going for to our Pacific it as EVP an

As in rebar we the group in footprint significant. what our in we've think the about itself is -- done bar

in come but rebar. awful see and mill what micro other optimism of in what and and we've gives Frostproof are and facilities all online Carolina, strategies our to in it Sedalia the Lexington, do running an excitement 'XX North us that we're so going in lot seen so And now

lot going will the point, know all it's Pacific range. that But capacity, grow similar market day. a we light is We to sure of to announced So million-ton that the of We to of there's see not know growing. And your again, Northwest. X that. know

the have there and return financial our long job. plant. our amazing team It's Seattle great an and time We of running does operations performer been one to a consistently

going John? we be of we to the And great holds so know We it in think And as evaluate the growth deal know this again, promise we it's customers there. there. months. coming a the

you, Thank Leon. Yes.

in on We're what has with in Canadian really bought good us we of As the that its also a of Pacific been our footprint. XXXX. Leon Seattle that small And Seattle in team for proud positioning we team the with has markets. The since growth current we're since in optimistic our facility done mentioned, face challenge future and acquisition location the XXXX, Steel is sits we really this very market. opportunities a about see mill really the that our and success the it's of Northwest delivered mill Birmingham in job

Over our the our grown really the last capabilities. capacity ability has our around grow us, has century, city to which and limited

all for speak experienced certainly Kingman. of aware coming So those cost the to in following in efficiencies But take our as and to to really as at XX technology the success doing the have of other next offerings. micro well. position about Nucor mills is position as that excited strategy well projects with the have been well excited a not really the about here that Lexington our of up increasing We're we for product advantage we're announced what mill years we're what we're We're on closely, were that. we've

color. right. appreciate the I All

Stanley. De The of next Alba Carlos question is Morgan from

moderated, it Can you Where mention a if steel is it regarding did what of pre-COVID fabrication has Just seeing to? potential deceleration does business, above sort bit the perhaps the the more little although important color will quarter backlog? levels. XXXX on magnitude and your remains order book, in deceleration, be for fourth of that pricing volumes, And the quite terms that in any into anything profitability us. products, you steel and continued -- your year the you're provide strong quite extend of

net would for half into I Yes. give going not ask door we're in of we our you for our year and back tell billion then as what the $X XX% opportunity Again, that's the generating to segment But business. question. had maybe of you. now comment. products think Nucor. kick off talk earnings, generated this an Ford our overall incredible Brad about it XXXX. it's steel where straight speculation becomes pricing I'll more. We've to quarters I thanks of and here's X really And been Obviously, they context Carlos, important or

quarters, to continue last $X over in peak continue earnings. think 'XX, And us the our and to the the again, down of to highs for in softening. grow generated mix is so marketplace, it that bring to It been incredible historic X highs and It's about it an diversity billion but is from coming platform we 'XX season.

And order seeing so no We're that are compared to period backlog. We're as up of again, they're in the there's backlogs moderating, dry up. of books but some cliff. But XX% not pre-pandemic XX%, seeing still those this over time. softening -- sort levels, again,

again, we and 'XX, backlogs as softening, out I into head about XXXX you still extending but finish of favorable we're QX those it's already tell pricing. would that into are So optimistic some with

So add Brad, that? want any more do to on detail you

Yes.

We'll some in are differentiate our down to still mentioned, we above results pre-pandemic One do slowdown Leon thing diverse addition in strong pricing our see of come And levels. strong continues earnings still backlog. some, have but time portfolio year. I and would mention this normally Nucor. well seasonal backlogs we'll great But QX. in have have product As is we as

joist and warehouse saw demand While driven business. volume by in moderating mainly we our deck pricing and

we product see All construction, structural seasonal profile and earnings X in quarter-over-quarter. had metal metal stronger buildings And pre-engineered We rebar saw businesses. our near but businesses, slowdown fab. really panel believe again, in in our we'll and some fab of record earnings shift the earnings our there's a been record business insulated

to Nucor we've bring never to The thing way We're other opportunities. seeing is bringing bring a solutions that value a them, to in done past. customers of we're value multiproduct lot our the in cross-selling

because just allowed therefore, think All versus command that had and I than you to changed as margins much did what right. press the What different much before -- market Is has do past. point. company maybe the pre-pandemic is could us than higher fundamentally something if a And the higher softening, any to we point the have conditions like on there construction you it price in mentioned. you can

a that looser therefore, potentially little the and wouldn't So your bit make pricing? market reduce

immediately touch out mentioned, is just breadth Brad I what product our key is the would on which differentiator. of Carlos, is a gate what

Dan and not Needham solution the sell So we're that approaching under provide say, and again, not at we're a and a provide just Nucor, how product. set and market do commercial look entire team to we

So Construction as Solutions groups attaching product sets to customers our areas now maybe entire coupled traditionally and out solution and either Energy teams, bring bear group, our can together that going to a our direct Solutions weren't are to set. with them we purchased that now or mill meeting weren't an offering provide

solution, we think and or manufacturing about the offer, to in and do build-out just warehouse we As complete build-out, look the how again, not now piece part on product out.

is traction and of gaining intention. And so a that would tell you lot I

are the the space, in is and that lot very the few, but of people There's in their sustainability. piece trademarked scale. branded The our world a green any, at products other if

products today those demanding we're in we're iconic automotive. a products... the running are scale our a diverse products And more zero which the and OEMs just much customer that that set lot attention of today so of is net through getting not It's seeing and

Sorry, go ahead...

X other And to element that.

outlined. group. us a steel You'll downstream while reason job teams we not businesses Leon predominant recall And few the time, it. took what really exactly you followed something to years for that wonderful several to there systems some love our did a that's restructure Nucor a within products But in long efficiencies doing. to ago but own different actions use is bring The

The next question is from Bill JPMorgan. Peterson of

market-related A questions. couple, I guess,

prolonged of the reactions I'm to context seen the the we've market discipline market the of how maybe in about few past maintenance end steel a we to mill in the you're anticipating today, the some sense trying get especially in extended. strike if So some and UAW think versus months, maybe median of a

the to under those a of how sense reaction Just get would be X scenarios?

that I'll I but Yes, second half. automotive fully just part of tons. the And the million X.X question, to I'm not first re-ask the sure I with second if don't, off one. is us exposure today Bill, caught Nucor's about start please

don't X% X% we overall volume. -- our or So of that's

for U.S. the automotive X to industry. But to supplier. So We'll X United to to million Award Nucor years. is not in us and the the that We've X last excited from of to States exposure grow. remains million economy. more tons ourselves watching huge preferred last the the over capacity for to of impact And GM it's X.X a as the -- the continued the profound a invent a potentially doubling continued sector Obviously, Supplier straight next in and volume it We've we're won longer to overall very overall Year part committed years footprint. have to goes, and moving that tons over the X directly. about our now the several the we've

what teams well most And of the most in is some things. high-strength of the coming about so some excited again, auto And Nucor despite advanced about We're by make we're create other positioned that advanced steels are U.S. the the grades competitors, the those doing they excited marketplace. incredibly our are to rhetoric to required from industry.

I the massive we in overall more and the see broader economy, get footprint. we produced million that market. out continue there. you're context, goes, impact and hopefully, this And forward spite generate. back for XXXX. Even we're Nucor XX.X to a or in not the that if a expectation So again, There's in I is impact in the ends can strike, lot and continue the longer of asking be into the units overall having to to supply But overall of demand track to think this going on the X move to ultimately, quickly can hope

question. I the had on CapEx. addresses a that No, Yes. question

about level should you've we billion prior does billion. I years, projected I $X talked for to now out of I thinking versus And a even how the company the next guess, outlined? the start at year, guess CapEx with given projects normalized like the $XXX You look $X.X guess, start about million? few maybe what additional the

the for thanks Bill, question.

So I good indicator. it's a think

year. do we all, we'll Board at after on get which year approval of the end on from give of First every spending, the guidance capital we our

we'll will But averages. When year give next can framework the that then help is you a spares through some to look include for call, coming historic around our well, probably be you capital we're as $XXX be just heavier precise you spending the what somewhere some modeling, safety-related would of in we you bigger And a at or a the next and to over right projects your that year. which our on see and tuned stay more of we maintenance, directionally, more should as So million assume CapEx, pipeline, that than you spending going CapEx now, our update. consider X. item maintenance

of of the second some larger team We a deck showed getting Relations think Investor the year have product given the this quarter spent projects, that bit is much around the first year. next or little put versus out slide how sometime --

So you can estimating use for a that good as framework next your fee. year

rate to the I important guess was guess, quotas more, And remove impacting of and I potential picture. time, could may in I'm part kind EU bigger understanding the you should market. this fluid. remains outcomes concluded obviously U.S. the of and be X tariff looking aware the an increased? would nothing what I of, been sneak asking steel this the Nucor's again, quotas a see If it market? U.S. steel Great. at context are the U.S. be that that were We the how

up move again, tariff a us a Corus of that when lot from the not overall the look, high market. the over probably XX%, XX% XX%, but the pretty a and still a we Again, picture a consistent wrapped XX%, a in at last Yes, last that the have number years, with several Korea, today The the talks really has on. get is in there's again, little but over healthier and the floodgates. I material the to think, areas, seen see And agreement we've Bill, seen we USMCA quota. change arrangement important with XX%, the with tariff we've don't been it because that years, open watch some agreements really European nations, Brazil Union. or other global I going a And X the

field they bright create USTR Secretary Tai, up that the or playing Katherine very shifting dumping or and are commented massive open to will that Raimondo well again, really floodgates the a Nucor have leaders those the X of into uptick times, incredibly advocate job I remain confidence you're does And to well, industry accomplished a spots TRQ legally tireless in in and of level and that deals making we subsidized many leaders, to a Peisch, her or not see we and a this Commerce Greta and States. United industry really I've Secretary know and U.S. sure the counsel too in the understand have, One this they doing a sure nice make

Seaport. The Englert next from of question Martin is

$XXX Estimated they changes both well substrate some per sequential [ the as costs. to I and around, from I understand true had think, quarter, Can costs while costs. of it of steel ] includes discuss anything conversion on some do you some to with as for conversion underlying substrate the ton, impacts qualitatively the increased the

to alluded to as this related some remarks of well. utilization you in think the I lower prepared your quarter-on-quarter

for think the Utilization and that's up rates I a thanks driver, highlighted pretty question. And actually you cost you impact the on big a that. it summed well. Martin, have major

supplies energy and a increase saw cost also and We services consumables. in

are So quarter-over-quarter. that of these product increases sort saw categories we

what predominantly in I would down. the mind, ago, against important you helpful? in had, due choices the think of pressures system. were which changes the conversation backdrop production we having Those encouraging Martin, the year quarter-over-quarter to cost I keep this concerned all too, year-over-year, And we we company. a had. moderated of are look to own our think were to were general, inflationary appear what's in We Is when about that commercial costs have have notwithstanding is that's

or Anything helpful. not with a pivots substrate costs quarter-on-quarter. with That's material impact

By substrate, you mean raw materials?

Meaning in cost, refer run them to it's you think -- to purchase that assets, don't if you have substrates wouldn't the ferrous have right? when captured across I Western the

correct, consumables, in we That's record CSI, purchases at The slab Martin. a point. good Yes. That's materials. not in raw the

does that an have So impact.

so of that's raw -- you're seeing reflected numbers. scrap the part material not the And that that's change in

about back at of there a costs some out lower Okay. in quarter-on-quarter and last of concerns conversion when your qualitative steel half ago, it Got implications the kind there's parsing lower just year called guess, it. back volumes the -- guidance looking anticipated you utilization. year, in and to the presumably, the And the inflation business I comments in the

some comparable they the at period. year net-net, thinking be kind of Is ago where conversion about? in to probably So although framework were right costs, uptick you've highlighted they below were the that a this in quarter,

Yes.

That's of this Martin, out think, to bottomed you you uptick, likely I the has if trends uptick. it things see you sheet, like for if the of you're rather look where fourth close might modeling example, flat -- quarter, an some continued quarter-over-quarter just point. because see cost more out for than at at

on has that our impact an system So flow and the through costs system. how

So not rate of fourth increase ton the into on basis and third you the see a going quarter. may per so the same quarter in

earlier before of Could mid-single in declines seasonality been sequential other Any have thoughts? to some that, digits. XX% was in a And decline remarks fourth discussion in color excess the here. volumes XQ it there think the of the sequential within you steep about maybe briefly prepared years, Recent discuss we of the in around rather quarter small in or in I Understood. steel business? anticipating kind of had but add commented

some where order with what and and think backlog highlighted, from about I we today comments book we downstream Martin, where products, sit Yes. sit. Brad

-- those the the X volatility trend an you saw averages some of to statement. rather over those the closer probably than is accurate think last year historic being I or

$XX back into on fairly pricing per declines would last but It backlog differing around the pricing good about here, versus whether specifically steel be color again, still to steel in ton in cadence pricing was going narrowing the $XX of But of the commentary X of extending that's could to across about on segments any I into here. small on the peak. XQ some decline year of prepared If regarding something on sequentially. magnitude? something from Okay. XQ, or and products XQ products next Thinking come it a off the one, remarks expecting X business

believe provide if But know don't outlook. I see again, think fundamental -- different again, we coupled of head we've more Leon. with we're we in Again, I we've there that the again, year. a going some into that you incredible more this overall in in sustainable. to generated comments indicate to shift quarter reset to context, as are our of particularly market returns, that a fuel earlier, was on what Brad's it's Martin, last softness color any pricing tried pricing is products that has a the say been which has we seen levels where

all we the quarter, some way back So see to of that the the has softness resiliency again, remarkable, heading while pandemic. last into again, been extending sector the

one So move again, XXXX to of strongest continue we as see as performers we be into our the that case. and that

and market. I navigating appreciate all color job the the down nice Okay.

question from next Markets. is of BMO Jancic Katja The Capital

was into year? in this the production at the XQ ramp-up quarter? also next plate know on Quickly level the can you and what should the Brandenburg mill us And let about mill, how think we

for -- you is Yes, Katja, Al this to thank Behr. the questions. Happy

the around ramp-up in comments some Just Brandenburg.

the We of First, to that things of our us And width milestones We've the lot of capabilities capability set mill, heat are to play. full to broaden to going crossed treat ran for its commissioned which strategy mill the with that XXX we've there's Brandenburg, of full in and plate the quite capabilities. inches. continuous almost build is was a We've quarter. well caster hit the our the was roll lines. the several

really some hitting So to hard milestones. key really, team work continues on the

strategic automation. we'll parts probably and be for the make the to complexity XXX,XXX We Part of and is tons You about which asked about itself was half, software we in second intent, just be to tons. couldn't there's under volume. also due its We'll mill XXX,XXX there's complexity using of complexity, decision guided a we're closer strategic to to that. to the equipment the of that of us compete. after Part market go sure to where is Brandenburg that

and mills of plate plate there's how returns it, tons really we be important operate portfolio Brandenburg We but a bring targets legs because rather part the to and we is X at our So that on an than volume other stool. mills other hitting to of forward. strategic impacting want X those

about half after total. that. the the second And you number So tons in best that's headed could next XXX,XXX we're is the give year for I then

color year, could And produce? the there is Or any for how about much it you ramp-up? can next provide

Yes. I the would would say we for we'd run rate to intended what half. be have this through closer

stay using continue of up and group probably about X.X return our to north million be as can but best advantage. strategic we'll on through we that, year tons as to more tons the think those strategic being than incremental focused I for the we'll and driving

like we should was just on rate. a seems rate quarter the think about quickly XQ? And It the we be should this there tax Is anything thinking it little tax about Perfect. lower. there? How in

Yes.

is the guidance how to that up. on bit little end move believe you a think going tax rate with the is will around the I year

on annual estimate. So you pay but taxes based it's your quarterly,

quarter what you you fourth let I'll use is. modeling estimate So the your own to think

from is KeyBanc question with Gibbs Phil next The Markets. Capital

decline comment on decline you a basis. talking Steve, I more third a being just more were Or Were percentage? about about fourth the of to than that talking EBITDA wanted dollars? you you sequential made the quarter of about absolute the qualify quarter

total at the EBITDA Yes. headed think about quarter, framework. third outlook. the we're Phil, if if a the happened that's for you're thanks for you're the on indication into question. that's quarter some that looking if want the very quarter But change -- fourth that outlook, the And good more the in seeing fourth direction really you I

your own I'll let into decide want to fit again, you So you how estimates.

-- state project? Gallatin, of provide did have but then provide color that on missed it, And any the did may on you I you

ask group. part I'll his to Query give of an update, and sheet Phil, you Rex group Yes,

third continue impacted mean, to Currently, work the again, question. production marketplace. we the the on for that quarter we've really in gauged focused And on. we call, we we demand thanks a as in at have in rate point. Gallatin which is what as our reiterate, our capable. second capacity we what rate I this But run we're consistency. said, our full run standpoint, on of during quarter, from mentioned group, Phil, our at just issues, Yes, that's really some automation to are entire But look With full

for Guess rebar new that mill. decision? on on what And when the really lastly expectations -- micro be Northwest in drove with the the for guess could are then announcement I the me that is And the what contributing?

the to Yes, variables the his through on expanding that mill project Phil been significant challenge. that going has work at that we're John again, announcement that up and diligence work an Hollatz all through, think and look was bringing and going it that are and the teams has go to to footprint well. drivers But John around touched fruition. I grown That really a that, as since city of into XXXX. becomes And

that compelling been serve see our going effectuate potentially producer And do markets opportunities shareholders. Seattle that? new again, our we continue customers, to How the team and that to incredible the there outcome. we do strategies we So an we Again, on gaining to customers. we how are serve do some great do for for has continue that a engaged is long-term are think Nucor, How customers? out those

providing against are future. for capabilities the that really backdrop drivers exploration most again, this our the And our so of customers behind in

that's fab in Thanks, mind Leon. recycling. M&A just I the whether it popped a here. across investments. you've know or I made in my internal the had lot and obviously What's apologize, further, X or but of appetite I for spectrum, current mills

in cost add But how at? with investing that of of appetite what's potential the the any to base are And be can So the asset willing targets capability on kind in. long-term you M&A? of you're quality of control more you're looking what and

credit I what We've got generated We've is you tell the awful free lot cash Phil, best flow. would of of a that rating an cash. we've industry. lot got Yes, the in

There of been. you in to pocket. period, make return that We're in very to matches But long-standing burning with We're so the a but going our the for cash no with. 'XX we're an under maximize and fit for a the We're things isn't to and EVA is Nucor's continually further full going returns. that going strong cultural things of going grow. the to our to We're 'XX create of mindset the years no chase look would Nucor. all great invest. going umbrella to an to not approach traditions things. growth. said, to for shareholders, those the disciplined look stop. Again, to XX entrusted return we disciplined continue going that to we're desperation strong of that -- think in It our decisions was We're driving I XX%. We're is future. those record how about shareholder hole team, Nucor and through hasn't how culture credit going that guiding years, again, the So there's bring is going be mistake, incredible engage to Nucor. that of incredibly that there wasn't companies We're we and stewards we're a and at know about to rating tell through can the appetite invest the going our has We're our shareholder been proud maintain we to incredibly choose maximize we is continue on capital in going think part to

Tanners from of Timna Wolfe is The Research. next question

a us, there's differently. view further flat-rolled sector. of we steel the mills on consolidation I other call the of on there be wanted follow of up just in heard that were Phil's I a to But and it see on if little ask question a could could most we that X

So do But consolidate do to without grow running to antitrust? been a further that of ability in organically making you issues also -- ways. your in further think agree you've any lot you there's investments into there's

as Yes. Look, play well. we're Timna, out that I watching think you, like

how so growing and you our tell see want and how company sure I speculate the out I we'll is clear this future. what is we in think years. And of in months again, our weeks what to that, that on cannot some But can investing shakes strategy and coming about for for

we've what good It's a the thing for industry historically, is So industry. consolidated. outcome. a seen been healthy the been is steel That's

DOJ I hurdles, not but we're watching stay on, this and plays to like speculate tuned. begin we'll out, even or how again, whether certain meet companies can't so you, And

Okay.

Gallatin anywhere switch near flat So ramping like you're we ramping of a quarter-over-quarter running up bit let for not me you've been at rolled despite and Brandenburg little the Gallatin sheet seem on the a up. doesn't gears down they're it rolled kind but If side, while, ask, and flat full look out. -- volumes,

sheet displace on also So than at that mill. less Is going any incremental? capacity? you full be know you're that running but the are utilization, rebar sheet new a you're to your not and a starting a different will Because be that I on Or might thoughts lot adding I missing? great been that. reason would rolled market to flat a capacity, you've but side, be for is your get It extra disciplined pretty of thinking

couple Yes, I'll a share of perspectives.

with They X of on highest on is thing budget Brandenburg's we've and the decouple though outcomes schedule, I project that a do Gallatin first startup The to ever want the They time in Brandenburg. safety for in on the been not while. history are Nucor. on and of target. seen completed

executed be couldn't more how is I and they've the going how proud group market. of So that plate to

worked again, would you've been are do, different they that to I bring in I've thought -- were but had of new that of lot issues online start-up facilities. and and to from greenfield X essentially Gallatin, integration I'm what the equipment made were systems months it the going not required of a brownfield, of us X safely, sure that Nucor all to very a in you they control that's of was the tell we visits we've we we Herculean, but Gallatin incredibly from a what were automation obviously, well to where you call team's our doing When in where, cost everything number look to be. seen So the there

when to outcomes? the Hertford market need. and something just of, they going are can make. additional going you'd We're But tons X-inch that plate that to the run or or Your look making not can We're the already any the is like at serve ultimate The peg we Tuscaloosa balanced. bring no. question tons Rex to to customer to comments other going Brandenburg are sure rates those answer make do utilization because to at we

Tim, is Query. this Rex

capability say mills, and our on to capabilities across As based our at ourselves our positioning levels -- efficiency I look of rationalize the the I'm sheet to plants. various we're product going

changes Gallatin, our supply at look of these market, which frame the at you if support automotive to galv applications. and all we pickle Gallatin have So line, continued at through heavy into

the galv with tremendous in coated You supply look Berkeley at that our side, line expansions there announced a automotive from plant. new for

to capability we we're to Westford and expand to going so focus. make our bottom growing value-added customers, going going Frankly, our to only capabilities be profitability. We're So with we're focus sure really in in volume. on expanding line and there, look just our margin Crawfordsville our that's that we're not capabilities,

market? answer the the Or just to on incremental, the like Westford -- sheet it alluding question additional rebar I incremental capacity? for was another they to X mill, in Okay. capacity? existing tons there and an were trying mills. that million replace on the be Are could sheet going side, get And the room to be if is it's you to will

for has been go be that sit be an think sustainability us the go, able where our incredible much go to our provide and us and be Part segment to a question, answer, fair the the about that's customers. to we We where Yes. driver going mill underserved. we is share to both. asking going of sheet customer have States we're for to going Nucor model the as don't Look, consuming don't to I largest asking and to that short market and in as United range is in going it's in it's the is need. that is think know forget And This

up. in doubt years to as So are strategy there's ramp into play both come pieces the of coming going no we that that that

we no, run of not in to we're building that think million so tons And we're going X capacity X.X.

to going it's build We at that to we're run expectations and X. to have X, going it full

What you just said, the incrementally in capacity. new

I Leon concludes question-and-answer would to our to for Topalian remarks. like conference turn closing the over This session. back

for our to I'd like the our Nucor our bar safety. strategy members continue team and closing, you've thank way raise the to growth executed on In

place this for the performance in year to and also rest through this the of you record capital. great of the order. and like each thank trust Nucor, straight fifth you I'd trust this interest your carry the to be our year thank and of in every and our Thank Let's day. shareholders stewards us And have and all for make a finish the in to customers place us you finally, you great performance. with

Thank has for conference now you attending The presentation. concluded. today's

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