NUE - Earnings call transcript Q2 2018

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Operator

Good day, everyone. Welcome to the Nucor Corporation Second Quarter of 2018 Earnings Call.

As a reminder, today’s call is being recorded. Later, we will conduct a question-and-answer session and instructions will come at that time. Certain statements made during this conference call will be forward-looking statements that involve risks and uncertainties. current believe, are variations forward-looking intended are on expect, and such statements, we that based expressions information similar to management’s words anticipate available. of and words which is The currently and expectations identify those

XX-K which on are will events statements forward-looking either date, them, in Although any available otherwise. events and or assumptions, there as call the are that assume affect website. uncertainties SEC’s subsequently update future the statements risks this their found accuracy. The made speak and related as on and can Nucor a based latest forward-looking reasonable and of these no may conference not to Nucor’s XX-Qs, Nucor result does be in be Nucor’s believes of this obligation assurance about to they information, not future filed only More new information

to Mr. Officer For of would and call go ahead, like I Executive Chief the Chairman, sir. to opening introductions, and Corporation. Ferriola, Please turn over Nucor remarks President John

John Ferriola

for joining us in earnings interest your of me you Other with second our members also and executive Nucor. call Nucor’s quarter today. team for are Thank

XXXX. as our is He J. business materials Joseph of Welcome, Materials, served our taking retired for asset experience the and time us first raw in knowledge with within years of Craig leader DJJ, Craig great XX is Executive month. to David has XXXX. over of last at Feldman. is markets acquired or the a His President Nucor the Vice Raw for Joining Jim who Craig. Craig of Company Nucor is which DJJ President new team. since Darsey, our a proven

Officer. Engineered Digital our then for Leon and Frias, more and Products, Officer; by our Products; Bar the Products; provide Rebar Bar Fabricated Napolitan, also second I Sheet Dave Topalian, highlights and details sharing for Joe strong responsible financial Chief responsible Beam Plate of responsible Financial We will Chief Tubular Utermark, Construction responsible our for Sumoski, Merchant responsible Products; have for Ray Frias and Chad Hall, our performance. Ladd Jim will about Products, Stratman, begin Jim quarter. for

quarter share, are record of another earnings for second strong the to a report per It is the diluted net second $X.XX with strongest Nucor’s in We quarter. pleased also history. quarter

growth Our backdrop XXXX was impressive five XX% steel disciplined second our regulatory all of of improved the these mill continued profitable of through mill and favorable achieved year-over-year utilization against in capacity economy a groups. product execution quarter and the steel We and across results to drivers an environment.

from to U.S. began this in improving strength our by customers; reform, our operational of that the continued XXXX, economy has trend fundamentals to year. in countries. As capabilities in Economic success. imports are major going has current low strength the trend demanding the up U.S. the expand Imports into to levels global all nicely favorable X% U.S. markets should of effect and steel rate, our to Section U.S. in regulatory markets continue. more producer broad-based and we compliance increased tariffs sustainable a is into subsidized the we to rules a U.S. long-term channels These our our that a the chain energized to of also imposed through allow being operational stable a XX XXX. our four, being driver cost than in compete; drivers of serve keys the and trade tariffs as environment and the and two, years being the with three, tax unfairly growth dumped other production for financial entering and tax a strength. The five, expanding stated clear is are the the under cases June, markets middle demand. by The reduction is and With of reduction energy in trade message regulatory leader The a XX business where illegally of done we U.S. down excellence economic fair tariffs based With serious The market; economy steel producer; a benefiting return past, energy competitive factors, in corporate strong become expect strong value U.S. are, XXXX. market and and trade result driving this combined are successful the of demand, we exporter. and to country, the achieving demand. forces commercial upon steel of that in one, a first or moving half asking in value-appreciative major environment practices send seeing five market which complement prices the and was are domestic continued The build the to for for Nucor. strength of of traded about is supply steel changes their

that steel for American however, pricing utilization as a acted capacity not earnings of strong Importantly, Higher this also quarter. of strength driver note is rates are industry. the Increased to Nucor’s performance environment. the want I long-term utilization our essential to solely sustainability due

in years spent itself you’re an of to market. advantage upturn As steel Nucor the positioning aware, take has

people XX% and in our operations, we Nucor peak by We made even By an business. our invested stronger in have XXXX. increased $X have the billion and since cyclical our investing workforce last

We on are those Company. the to move now value profitably and investments capitalizing chain the up grow

on year discipline strategy first pursuing profitable growth drivers half strong five to year last focused and our of this is the that are In market, continuing Nucor working. proof remains Our long-term our financial the successfully execute this of performance to during strategy.

Illinois micro mill we at the exciting for And products is projects two Missouri. in Site are our currently billion. $X.X $XXX total expansion MBQ long mill, mills mill preparation implementing We and the rolling micro of modernization those our have Ohio at Four include are about investments hire already initiatives, mill, million. underway mates. than eight more in team rebar Florida. in begun totaling and to and rebar growth The Missouri the

our The in are group range and galvanizing Steel projects joint a will additional galvanizing cold new line sheet our at venture and line XXXX with JFE in a total the Arkansas, which market These the million. these through dates rolling to other Mexico, for line include mill country. in automotive in Completion build projects mill galvanizing eight specialty serve $XXX XXXX. from that four Gallatin, and approximately projects

record high-return Frias organic long-term value-creation shareholder about financial extending second our provide will sustainable more these investments. to look We we specific earnings quarter and are the through now growing not Jim position. clearly forward power, Nucor’s long finished and track Jim? Company’s detail performance of

Jim Frias

afternoon. good and John, Thanks,

earnings second Our over our $X.XX substantial represent first earnings XXXX increase of quarter per diluted quarter a share.

stronger our John three investments As the team’s the attractive deliver quarter ability conditions downturn. profitability compared made much first of increased earnings second Nucor significant and their year’s our and noted, of to returns during our result market were All segments to the improved on quarter. industry the last

markets. was recently groups, mill of bars all at segment operations, downstream sections merchant growth mill serving product beams. tubular acquired bar, sheet, and and achieved performance rebar, products Our our plate, our highlighted structural strong Profit the segment growth steel engineered earnings electrical across the conduit hollow by steel

savings DRI business in well as material Full-year Nucor our DJJ to as attractive from to estimated our of capital two-thirds is scrap profit aggressively of planned our purposes. spending job-creating, be profitable XXXX approximately $X expenditures Our segment from $XXX with realized projects capital one-third million. facilities. of increase growth. raw Approximately capital long-term, expansion, and both contributions continuing XXXX remaining billion. cost This invest for spending is significant are the for is improvement, a XXXX maintenance product

evidence target long-term a of return million. an to shareholders our Nucor’s than also with rewarding through multiple in capital. of the consistent of about first Company of steward is as Capital noteworthy million Nucor growth returned capital. in the and are provide about facts of earnings. repurchases platforms, million shareholders minimum half $XXX of shareholders’ meaningful $XXX $XXX first half returns via our cash more invest to cycle valuable with record shareholders of we share the our XX% returns Two dividends of of XXXX, In our to the effective As XXXX

Nucor’s regular dividends. base or First, consecutive XXXX increased XXth year of marks

the notes, million $XXX at and maturity treasury cost June XX just and million $XXX million of of X.XX% notes Combined XXXX XX-year weighted X.X%. interest we $XXX of includes of December rate That shares the share. XXXX X.X stock with per rate the Nucor’s XX-year $XX XXXX. an than $XXX notes X.XX% of X.XX% issued the repurchased million of of shares notes an lowered at of of Second, the first The in million nearly maturity interest XXXX. April, holdings rate XX years. coupon long-term our less debt XXXX. half repurchased average over $X.X XX% million of of of Nucor the and life-to-date under at is in facility’s In credit extended and the undrawn. lengthened Nucor’s and was remain the position billion, position cash debt X.XX% of our capital cash facility, generation of our the $X.X just $X.X outstanding second financial of maturity weighted remains quarter gross average total our end strong. liquidity maturity With April quarter strong Nucor��s of to debt ratio billion to was to to second which billion includes revolving fixed average unsecured of

on cash XXXX $XXX operating in the markets. there customers, by was a very same discussions provided end-use at approximately funding capital with requirements million. steel time activities of was upturn. of our Based the achieved at strong fundamentals First sustainable Nucor’s working while half generation and we cash robust is believe cyclical strength market strong increased

Earnings primarily steel further since Our expected of remain our the XXXX. of margin and compared upward are product segment with to in of third improve The the strong the of beginning XXXX mill are trended steel backlogs third and expected plate and expansion in mills. expected steel to quarter second performance sheet at to the is quarter quarter have robust year. mill XXXX the

XXXX delivering in Thank margin due our our returns performance XXXX. steel second material expected to quarter segment on in similar to Company. to interest higher raw third the is you The of quarter John? performance your third on care capital of products our segment of focus of decrease to our for customers. remains be Nucor’s invested compression. the by taking expect our We quarter

John Ferriola

on will country, a creating teammates Thanks, a every comment perspective. market to if answer by to trade with our provided. with freer, want for we administration’s domestic over appreciates The Jim. We great imbalance brief work growing? be We this long-term will continue the do of trade a agree be stronger profitable our operate customers and that leadership and to believe workers more is a a is these seizing subject the efforts like to efforts view conclude happy our $XXX hard and our Charlotte massive team day safer issue. fairer build to Nucor. billion to will strong the trade. It What manufacturers, that across with all the to happen We a lead in that I’d address would needs considered opportunities XX,XXX to is international thank economy. benefit Nucor now questions. I your American to you the with

Operator

We to will with Deutsche Bank. go Instructions] [Operator Terry Chris first

Chris Terry

into the first XX% just is dividends buybacks year net possible on of that Good Can capital are maybe minimum into the little question My of supplementary so, just you a income. and afternoon, guys. around the versus the return, comment XXXX? end the

Jim Frias

items statement Thanks. our about This that Board And about closely will you to investment We strong work guideline, of of use, a which the know Frias, one that very very income want rating. Yes. answer structure grade shareholders. to committed to also we’re We we with But, minimum how earnings of sheet think trigger. balance because return develop as Directors credit returns shareholders. is the XX% we the Jim question. a to use is to of we a I a

strong published we be want So, investment on obvious, debt-to-cap, grade a but to we the look haven’t have idea should based range, we rating. a -- the at that we the maintain

net-debt-to-cap would full do return now, we probably to position, high, too too our we our place shareholders; the But, we a throttle to right shareholders. at is got in might easily low, we’re look return where and things you can XX% If net-debt-to-cap if if more back. we

project when dividends Secondly, miles an we and repurchases, value the so of use value based intrinsic choose we regular is company again on show that share we Board between a the we do basis, at what prefer stock more on supplemental we our is And dividends. the stock earnings. a the attractive, think the forecasted stock back when If is we to level, we dividends. pricey might versus buy the

John Ferriola

investing only our first priority that remain Company. This of for growth is I’d our to course will thing John. The profitable add of is

Chris Terry

you around the specifically mills decline at the on And stand structural talk the then, year-to-date, do mill and a helping imports about performance steel about long that and forward? you your plates X% you market just look products? commentary long sheets in product Can bar If just versus How about the sheets. the think segment. of and XX% the going

John Ferriola

been the the performance with quarter, little during script. products, we products a up bit. us our in that we rebar And were the also down little see long has were in particularly imports quarter. second going but our a long in did strong and We in but see certainly the bit served markets. well construction doing better, products Well, long Frankly as we plates mentioned pleased sheets

Chris Terry

materials for is progress, within plant? the for through you’ve out from the Can DRI And impacts And the one what last the just just you outage mentioned DRI on Louisiana XQ? guidance talk Okay. coming raw segment. me, the that considered

John Ferriola

Well, our we outage into have on guidance. just And a update quick give you the the shutdown. I’ll baked

this shutdown in now. perform tomorrow. is are we planned maintenance to [prime] [ph] days. As was down for on about vessel scheduled on to heated, it last be sometime XX it’s DRI predictive facility, our and we and produce pressure the loaded, I mentioned And to are building scheduled The call, preventive

day. right start-up, [prime] So, tomorrow looks as pretty the now, during good start-up DRI a of for producing for sometime successful [ph] it

Operator

Goldman with We will Korn Matthew from Sachs. next hear

Matthew Korn

had of couple So, the questions on product side. a I

the We coming up since division. about tubular in two assembled are you years

you Then, get financial, are at go performed with it from across do any here? on to elsewhere? X.X, or cost products? effect you million other annual efficiency, particular You X.X or grows. rate. higher? operational run platform? effect can now your X.X running has cannibalization where structural expectations, million or finally, overall you division selling from demand Nucor what any the tons to that above in have Can beams selling How see how are your relative you that HSS Now, Does are Then,

John Ferriola

no. great, great, Great, yes Okay. and

Okay.

in been sheet our Let has sheet We it of to into would going be our that on of would add they group. fruition. knew the their tubular organization. standing me The would a profitable fit group We just that outstanding. has value I’d performance that. surpass were there culture, its our be it good knew We on the synergies And acquisition. on knew bit be that The elaborate been well We great. the it across expectations. own. Frankly, on business a And came little would all those did based impact this. knew things

is -- some with And to. group business might competitors our tubular increased. we been had of we to effectively we we’ve more concerns our group. this the happened of tweak that function lose and able the customers steel from excuse competitors our it’s me, a some working steel. in that to business the learned actually that and as currently entered our we in And tubular actually I efficiently the we runs to existing produce of [indiscernible], One sheet sell that think chemistries fine-tune into What’s business. how we tubular produced and We’ve has tubular was that products other with

with fronts, We’ve a and those really of homerun. all on been it. So, it’s really, pleased been

forecast haven’t than million on tons; year will is that And we for anything, our will negative or structurally are think about year, mill XXX,XXX of We there track working X.X, that division. We you construction somewhere bit our X.X we around year a tons. skyline really little -- last with latest was this closely do products. year. would that related this last and more in If the division our other putting we’re on tubular with to any impact seen more be our

skyline and business. that both expect to We tubular another our to bring value synergy that to be will

Matthew Korn

elaboration. Got it. Thanks, appreciate John. I the

focus up taken capital putting elaborated Is in think on investment, been [indiscernible]. on look you does has as you there overlooking? really that tubular, after micro any Arkansas opportunity interesting you’re the Gallatin out in acquisitions for and anything really allocation? about out mills, from like Following today, for set out, And what together your assets as that, thinking there that’s is there steel-making, we’re those you there another call that

John Ferriola

look don’t We at just steel-making.

but As opportunity fits all that when our keeping specific you and of we’ll the our want plus that respond well know, yes, to, is there to organization. businesses. appropriate appropriate look at eye our speak groups, And becomes the price all on nothing we product our all available of we’re into at I opportunities

Operator

from Jefferies. with hear We’ll Seth next Rosenfeld

Seth Rosenfeld

questions quick of today. Couple

on us quarter-over-quarter, in significant understand us increase to moving eliminations, fact last why just I believe sort Can QX. pricing guided intersegment help increase quarter help explain, how you of First saw was you is trend you in the the very forward? decrease in in just guidance, that

Jim Frias

now that’s is to answer compensation the up million Then, there that first things Elims options. And units One significant make is date in major compared that X second intercompany a revaluation went four that’s and that probably by grant last the quarter. our $XXX There process, roughly is Frias, quarter that. June up. is I’ll stock this - is I actual for Board This Jim save authorizes. a will to for related most that stock inventory those piece because piece. there

quarter And a every there’s so, the therefore, year. spike second in

second $XX about the $X million closer quarter and So, to million. the expenses were first in in quarter, were those they

year. quarter by balance So, will a million for run normal to back over the $XX more quarter; increased it go about of that the rate

profits basically get related we $XX stock expense That profit from second XX% event $XX compensation. piece. quarter. sharing, then, down in think pretax teammates. increased, Interest happens an is set million, another spike to million, every aside to down; expense a went it We that just from Interest quarter. million of $XX almost million our doubled under is for expense And million. that is is $XX this to actually So, second $XX

But that, ton inventory look So, we that the per margin valuation $XXX the as things then, $XX by million, saved there. inventory to million. $XX than volume affected of million about million are at $X from we the And inventory. more increased went and of the piece

up going the by So, went X%. was thought it flat; to roughly volume we stay

over DRI, steel. just got the but and in the we not that steel the have inventory finished scrap have them. mills includes to all And tracked We DRI, tons products and X.X the Company million of the in way just scrap that DRI embedded and to the

of there that So, improved increasing then, X% happened. in margins about quarter. secondly, second XX% is volume And an the by

rate So volumes pace. in relatively will the will to fairly flat, going a little would go run And stay We really reached volumes third but not bit think margins the close question is quarter. that the level. forward, flat up nearly a they might think We change. same

we a to wouldn’t number. of So, kind see same expect the

or be would expect elims QX. in intercompany inventory that to that than we lower QX So, piece

because not because number to feel really it’s an are depends give But, those that We going lower it is are hard variables to be absolute our to Does on factors. gut some of help? going that predict.

Seth Rosenfeld

significant it plate is And there current any peers trends to where second to half think in you. products demand That you characterize Thank just the ahead capital? do of U.S. market. Plate of the of yourselves the please, Yes. capacity plate you allocate on give attractive one looking us and a further growth, pricing on bit take the out as perhaps by area out make you how year? would helps. digging not What in color more question, stands your or Can one

John Ferriola

our was strong, business plate quarter second our to only in very frankly Well, sheet second business. the

were operational care it now. volumes -- we little of quarter, Tuscaloosa, that of into Some and back at we a issues bit our steady at some were that They basically because took had Hertford going back was we’re operational in and off second issues mill. of our

us. of consider. would we for it’s said good been invest willing cyclical areas, Certainly right forward, the the been a most moving business, cyclical see a And we would to in businesses. probably it’s plate. of as the growing It’s like that long-term our capital, of plate terms would earlier one we In for one certainly over business us. be If along, opportunities good came I

things to business both the hope we for, the our of our see of infrastructure a we structural plate One of that need out infrastructure and bill. that hold an is some lot form

it While with bill infrastructure hope have infrastructure we and we’ll in this are Washington significantly much we have it’s do together to the bring a today. that that next to pretty see confident way a going we find that year, deal could needed crumbling working won’t we be put to year,

plate So, structural we horizon, to construction -- think that a better on as infrastructure beyond and continues demand. to see the improve, continues

Operator

will now Bank Tanners from Lynch. Merrill with We hear America of Timna

Timna Tanners

you want horse is to beat I point your second out guess dead on allocation capital I this as ever. quarter because best

very least expect U.S. products. demand, second highest at strong in steel history the You for prices continuing some

on this So, you you stay you to But to you well I billion X grade. be did, just want generating amount cash the free of right, at annually, continue of understand extrapolate. flow track over if would investment

it as understand did back I then? you you’re shares environment, like playbook if capital? you XXXX. then, possible that special back elaborate your as So, a about as if still of could a lot buy thinking we a very you how if did I and good strong little do to a want Are something earnings look allocating more? tactic mean, you for what Is dividends you just you you similar look did is contemplating pattern historically just that at

John Ferriola

growth profitable that reiterate our to look, going a bit first that what I earlier priority our little I’m Company. of said and is is

to there. grow out for profitably be that to opportunities So, Company. continue think We might to there we’re going look some

that at nice company, of in horizon available. look number and the at we’re day, of say that X come continue we do there reach them profitable always think will end the to result of of the we growth going in on all you round we there If shareholders. return capital balance advantages to little a will quickly Right Remember do. was I acquisition. one early. little opportunities keeping would our we’re bit powder our great of strong still now, And in ability the a to of have that, the it’s then a what that think a We’re a we We’ll dry, case position act sheet to come when anything point our we isn’t would the we tubular out do having that the such threw do billion up. I to, where out valuable

billion. opportunity with We to almost company short grow to in To a time. have we an that, the of And -- profitability period because because of $X three of financial our cash. conservative fairly were Bear have in or acquisition do we’re have and billion acquisitions in we eight $X about done of weeks. that those six over practices, three period our strong mind a had position

have us deal. to very the cash they for when they can that cash quick be the we a So, and to tell with -- we us know provide and sellers deal obviously, it’s like it

to strong opportunities balance So, keep we act and come can when those decisively. we sheet quickly want a up, so that

it view. if don’t we do returning more dividends, will an much we shareholders. that’s helping with more is do price beat really Jim dead more go fall on mentioned horse. they to back value at into Now, now I then can makes with know we stock think it evaluation. our how that to repurchasing then, And earlier, dividends; up, we��ll shares. shares, we value if our where will that But sense as by it creates don’t come you it repurchase do we If a

Timna Tanners

would I I enough. try, thought fair

question other The wanted ask is… I

John Ferriola

We appreciate you trying. We like that.

Timna Tanners

into be types be you coming with see? XXX of with is House that by steel and there coming your content. Do cases bit cases to there’s think the U.S a talks going content antidumping the not further latest of more targeted you of to steel case taste more would your steel types such just the out, Can give Section that close You’re us these White that been and them, cases? we but of might products

John Ferriola

have or successful because prosecuting, are a always that we’re with stop of sunset We We five we’re maybe when of to of the that in ability case do at to not any going form you minimum years. looking another and five XXX review transaction. that to trade case comprehensive other years recognize a extent that’s it prosecuting a

success. So, that’s long-term a very

we’re I’m there by not still and of are will that if are That them, going are points couple to good, some in occurring; looking at mean, that been all believe got points them. couple. nature are tell cases the egregious We And XXXX, at violations things. But statement, get going cases. specifics. of been are right been play cases of cases. cases played ITC we prosecuting couple might into I you we we’ve to the as prosecute But they extremely points away. two growing So, understanding to countries the that being have lost continue now. There in and game. haven’t the the was it there will to to products I track solid as these a violating got -- think general those got industry, we have the the prosecuted we’re track. and the we’ve out that that be countries If games since whack-a-mole Nucor, in one. but mean exclusively point cases. I the will I we successful speaking great record of not a has and right, I that the numbers number I’m about around It the one, incredible to successful industry I it’s a in continue have of to looking XX

We advocates with comprehensive substitution go to around that two prosecute. I quite to product be continue strong that. that do XXX going case say to to bit. us on country XXX, we’re a will continue remedy drive and trade crazy, And each ability whack-a-mole we speak a that So, currently the provides about to eliminates the the of XXX. taking years

come to and So, be is back We our partners which XXX XXX I good balanced the We reasonable and trading action. that the tariffs, reach that with the massive the a believe American we think will tariffs good trade believe for XXX it’s back is workers. steel to addressed. deficit industry, think table for we’re that and -- agreement, with customers for the happy incredibly needs good all-in-all, it’s very justified. the come more help trade trade And and

Operator

Gibbs from next Capital KeyBanc hear We’ll with Phil Markets.

Phil Gibbs

down in XXXX profits in a what I of were into wanted total. you stated drill to bit better the material did division. raw little than The all

-- had started the that considering eliminations, I the think, high at was offset ferrous of Should scrap you model, really, so see to number was and strange think I’m some it. think to there It to obstacle side. prices that odd those level all just and eliminations you a through my it have surge in DRI really out type just corporate of trying was in outage on we that profits? that

John Ferriola

again, any more they push DJ they any that extra operations. that of to the their further done year to also And to in We’ve They is a time kudos have improve costs last few do mills, been DJ our and of last times also can’t a a big the six so with become X program. very that and seem over we their Trinidad, you becoming I but facility. the it’s operations. that. the team every team. Joseph you that There They’ve steel we the of quarter, the call help efficient, mentioned a call processing and find have our been continue call once stable, contributed say me That’s have our efficiency of bit months. more But on efficient. on It’s they’ve last stellar frankly alignment effect They’ve give X, last going Louisiana Let over thanks mentioned. bit. our running little and over [indiscernible]. months. to profitable the has efficiency reduced be X, been job and well a value way again, was to what out that continued particularly for And and mill finally, a the plus. Joseph our of performer little to only healthy effect though, would not effective a the largest Once an initiative fantastic and a to do

Phil Gibbs

you into decline, it, we’ve pressures and mention the starting in that China. margin to you pricing, in look non-ferrous as see think talking declines some those to copper, division. particularly about? margin pretty gross Okay. I quarter, staggering to some John, for seen weakness Are of look byproduct we shutter did as we’re things the third particularly you prices coming the at driver are some biggest QX in And relative

John Ferriola

want they’re to I’d the say factor. anything to you Craig, add do that? that biggest

Craig Feldman

that of say pretty made eliminate on working only lot I’d their see and probably been purchase are well is Yes. statement the we now of right XXXX, publicized. they we’ve headwind to scrap a time. going some for that’s China that quite a They which have from

So, it was not to a us. surprise

We to have non-ferrous attempt and been I’d products accelerating products to say. aluminum our go ready furnace

Operator

From we next Stanley, Morgan will move Sood. Piyush to

Piyush Sood

the roll second on I the talk the comments them? flat more in Could about and for couple We at on conference A bit question little Louisiana, a heard West DRI you Coast. plant AMM mill think a of some me.

John Ferriola

responding a I I whether That long-term, West DRI and any in asset. or valuable that sustainable a was question being that thought have to was whether not would and was Coast me. the on interest we

scrap So, have is so many as ultra-high chain, that more United things in steels start going And strength pressure presence goes yes, as we I need said I I recycling I’ll that’s times, believe, up in the the come of think of manufacturing times, many think our prime value I the because the to of DRI. scrap, move of do with available. on time talked it -- about we reduction under to as Nucor, become steels. and going to automotive continue to prime That are and we, States. continue less do

regions going such Brazil virgin have not coming the So, iron of yes, as with time. prime, concerns stable pig is in to And past and unstable continue reiterate units some out can our also challenge from HBI Ukraine. certainly be world. for talked iron the the the getting will country we geopolitically but and we in Russia these Venezuela most are about

we that to we of units, So, of make we that chain. iron take the can needs move virgin to need sure so our a care up continue can value see

an plant. necessary, facility that the place will in evaluation feel DRI that we as we at to make second some that we the of have to in on mentioned and the past at second consider time. So, point, that’s the If the all we infrastructure expand will right

the to about for good As the in be time at get moving was if would question plans the there the cash, cash. West and out mentioned West no Coast. that the to are want haven the surrounding were Coast because surrounded I cash far production the to that limited and cash of to limited a to -- goes, this our anything Coast as market relevance out facility. And West or we Coast. the time, At talking location the from really did we -- West

Piyush Sood

as some have U.S. own other put And second Section tariffs, counties their with the question, retaliated tariffs. has XXX

your So, coming months? in U.S.? how you about the any exports are in thinking Do concern see you

John Ferriola

it will Well, but be we’ve be won’t there done some impact major. analysis and

of that that Canada also. rebar be it actually out at into One recall Canada. But be business, send other us can coming rebar the things country is to you into limited look our we what remember, if will is which particularly into not countries shipping have from you the will to

we So, net as zero situation. see actually it a

domestically rebar that And speed with we’ve fact, country. will and what serve with mills demand be a able In of up help that will micro be regional with increased an little this for selling -- us, that will better too remember out our markets coming locally believe we the to have we next [ph] scrap be us or for been that bit will we over year rebar. two

plant Mexico. all major I automotive that So, will in no, galv Mexico. we at line a impact about serving got in market be see in our question a the but that you hope

that. don’t see on we a negative So, impact

some net economy there be States’ day, So, United of Company end will the have of It in to the to believe and and impact. I be general We overall, at won’t a that major. trade. we frankly what’s as will result gain our happening for the steel the

Operator

with Hacking from hear Citi. Alex We’ll now

Alex Hacking

So, demand on levels reflection at and inventory increase your Thanks. any good simply customers, volumes. you quarter a very strong this in sensing lower you a underlying had of or Are strong imports? is

John Ferriola

pretty was neighborhood I And in No, that’s at X.X. was And there inventories just morning. actually relatively thankfully, this the extremely center X.X low, of service looking are a somewhere all running merchant see to shipments. have abundance certainly over up that pretty situation. say And there or significantly side, an customers, helps talking lean, commitments need that our their customers so, the but filling steel would we our sure that’s very We the center been been small. number. of at they’re of our quarter that get keep the a making you to And inventory have happy. the on to also that running and their look customers service OEMs, in low shipments they they is some produce products are And the inventory uptick small I product to and

Alex Hacking

steel through? some knocking on customers looking we’re are guess, the color. your it it seeing while? assuming around for import you on more steel. Thanks. of the having haven’t trickle terms while for in is Section you’re that Thanks changes your and with that of companies flood haven’t a coming new door knocked a a on I that for in people a of new door or Is I’m for looking And lot come or XXX

John Ferriola

we’re a happening. the for trickle our we’ve would able and say steel that’s the taking and increase the We’ve to care I seen meet request long-term royal in guess their been notable customers I request. between flood. of somewhere Obviously, and

door; some possible those had of take customers. we have to We the customers new come when care

is those how they times One desire our what higher things are we strategic to they the the look strategic of that to allocating products do customers are, when move plan into we support products. of some our in, customers for and consider value just those new

So, strategic strategy. would customers factors. our we we long-term whenever customers; who’ve say, can A, of at have our take particularly we helping been lot been first, to to look take we of and secondly, us, new loyal when a long-term been But they’ve I our marketing care

Operator

John Ferriola. turn at for closing remarks, to like And back things this to I time, would

John Ferriola

you Nucor. every thanks finally, for for you it safely. shareholders. and a Thank So, to winning let saying We doing We our to you Nucor thank ready in to you close to thank Nucor join me for with appreciate team. do And day. our the let’s run every customers. good always most confidence seize in all you And teammates, my ongoing you Nucor’s keep to day. appreciate by opportunities. what and your to for interest new your Thank together. Have And talking day. our business to with And your you opportunity long-term importantly,

Operator

today’s will for that you Again, all joining us. conclude conference. Thank

John Ferriola	Chairman, President and CEO
Craig Feldman	EVP, Raw Materials
Jim Frias	CFO
Ladd Hall	EVP, Flat-Rolled Products
Ray Napolitan	EVP, Engineered Bar Products
Dave Sumoski	EVP, Merchant and Rebar Products
Leon Topalian	EVP, Beam and Plate Products
Chad Utermark	EVP, Fabricated Construction Products
Joe Stratman	Chief Digital Officer
Chris Terry	Deutsche Bank
Matthew Korn	Goldman Sachs
Seth Rosenfeld	Jefferies
Timna Tanners	Bank of America Merrill Lynch
Phil Gibbs	KeyBanc Capital Markets
Piyush Sood	Morgan Stanley
Alex Hacking	Citi

Nucor (NUE) 19 Jul 182018 Q2 Earnings call transcript