Tristan Gresser

Management cited lagging contracts still turning to higher pricing, sideways scrap, and normal-course maintenance outages at the three flat-roll mills as embedded Q2 costs.

Management said power demand has stayed steady with facility-specific contracts, but flagged concern about data-center-driven grid build-out and reliability; no near-term aberrations expected.

Barry attributed gradual pricing to increased customer confidence and supply chain focus driving longer-term engagements. Market is demand-driven. April executive orders defining derivative products encompass entire steel supply chain. Circumvention cases filed. Section 232 protections valued given global disruptions. Long products particularly strong with early project engagement through fabrication networks.

Theresa confirmed not EBITDA positive for full Q1 but February-March combined were basically breakeven after January pause. Full expectations for remainder of year to be very positive. On BlueScope, Mark confirmed best-and-final joint offer with SGH was presented in February, rejected without constructive engagement. Strong partnership with SGH continues.

Theresa confirmed current market margins exceed through-cycle model assumptions given Midwest transaction price levels. Not prepared to specify Q4 2026 profitability but all market factors position for significant advantage over modeled through-cycle returns. Still working through start-up items.

Barry explained transformer failure was an original unit subjected to early start-up stress. Had been monitoring it and proactively purchased replacement transformers years ago. No injuries, damage limited to transformer, operations resumed within twelve hours. No ongoing concerns expected. Underlying engineering issues rectified.

Theresa noted 2026 CapEx of $500-600M includes $200-250M sustaining plus aluminum and biocarbon tail. Mark outlined balanced allocation: dividend increase expected, continued buybacks at perceived discount, pipeline of smaller organic projects in steel and aluminum, and M&A optionality. Emphasized disciplined investment approach and highest ROIC in the space.

Theresa confirmed Q4 EBITDA breakeven target unchanged. Higher Q3 costs due to accelerated testing for beverage can and automotive products with certifications coming faster than expected. Still confident in exiting 2026 at 75% utilization. Declined to give specific ramp utilization guidance for 2026 due to product mix dependencies.

Barry clarified pig iron is flat-rolled only. Butler has on-site iron production facility. Historically shifted supply from Russia/Ukraine to Brazil. Can balance metallic mix using Omni's captive scrap with separation technologies.

Mark emphasized supply deficit growing, imports now at 50% tariff making domestic production compelling. Theresa added that spreads used in $650-700M EBITDA model are more conservative than current market, significant upside potential.

Mark expects tariff levels to change but tariffs to remain a mainstay. USMCA renegotiation in 2026 expected to improve trade environment, particularly preventing Chinese transshipment through Canada and Mexico.

Barry detailed resilient demand across construction, HVAC, appliance, automotive, pipe and tube, and rail markets. Customers cementing supply chains through longer-term contracts. Shipments not expected to go backward given Sinton growth, market share gains, and trade case benefits.

Theresa confirmed year-over-year volume improvement expected based on current order activity and macro environment.

Mark explained delay is standard procedural for 10-country cases. Confirmed import bump observed but subsiding. Expects very favorable rulings regardless of administration actions.

Barry addressed weather tightening scrap availability but no significant operational impact. Theresa confirmed seasonal volume increase expected in Q1 and broader optimism for 2025.

Al Behr broke the segment into recycling yards and DRI, noting a quarterly DRI production record as rising pig iron pricing made DRI the better alternative supply.

Jack Sullivan reaffirmed the $2.5 billion CapEx figure and said working capital should moderate and could be a slight source of cash in the back half.

Steve quantified a $500M EBITDA delta from the 4 completed 2025 projects plus continued Brandenburg ramp, representing the incremental uplift expected in 2026 versus 2025.

Brad Ford cited plate backlogs up 40% YoY with domestic consumption up 15% and imports down 20% on cut-to-length plate. Randy Spicer confirmed Lexington and Kingman expected EBITDA positive by end of Q1 and fully ramped by year-end, with record rebar backlogs.

Steve confirmed Expand Beyond on track, noting long-term run rate target of $700M EBITDA as towers facilities enter full production years.

John Hollatz confirmed joist and deck order pricing now matching backlog pricing for 9 months, signaling stabilization. Leon noted demand optimism across products groups for 2026.

Leon identified heavy equipment/agriculture, residential construction, and auto as three areas expected flat or down into 2026, partially offsetting infrastructure and data center strength.

Leon cited $47B border wall funding, $29B shipbuilding, $150B defense spending. Steve noted $620M+ Q2 working capital build will reverse in H2 with dramatically improved free cash flow.

Leon confirmed no tariff-related cost impacts in Q2.

Noah confirmed WV 40-50% complete, on schedule for late 2026 into 2027 startup. Leon attributed budget increase to inflationary impacts on contractor rates, materials, and labor, not scope changes.

Leon confirmed active engagement with the administration on raw material tariffs and derivative products but noted it is an input, not the sole driver of policy decisions.

Leon expects all TRQ and 232 arrangements to be revisited under the new administration's America-first trade agenda, though noted this is his personal view, not inside information.

Leon declined to speculate on USS but reaffirmed discipline, emphasizing Nucor's 60-year track record vs USS's failure to invest. Articulated West Virginia sheet strategy targeting Midwest/Northeast where Nucor has lowest market share.

Chad Utermark quantified towers plate consumption at over 130,000 tons annually once fully operational, noting strategic positioning of plate mills to serve internal demand.