NUE - Earnings call transcript Q3 2018

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Operator

Good day, everyone, and welcome to the Nucor Corporation Third Quarter of 2018 Earnings Call.

As a reminder, today's call is being recorded. [Operator Instructions]. Certain statements made during this conference will be considered forward-looking statements that involve risks and uncertainties. The words we expect, believe, anticipate and variations of such words and similar expressions are intended to identify those forward-looking statements, which are based on management's current expectations and information that is currently available.

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

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

John Ferriola

financial months diluted strong earnings share. performance financial Nucor's continued and Topalian, Ray earnings joining our sharing also our highlights Products. Chief Beam Hall, per Good for today, Leon members third first performance. Bar per Plate Merchant Utermark, Nucor. Materials; third for Frias, third quarter. Financial call Other and Rebar our Construction then Sheet and our our for of $X.XX from Officer; Products; call Joe on Bar Stratman, for net responsible details including Nucor's quarter Products; Raw responsible Jim diluted Digital interest the Officer; afternoon, you with will Fabricated responsible of responsible responsible for quarter I for about Dave team Feldman, Sumoski, Products; Napolitan, with provide executive the in and Craig of today's responsible begin for the you call will Chad for are Ladd us and and share Chief more into and thank by you Frias earnings $X.XX Jim Tubular nine for Products; your Engineered

to XXXX record pace for a We are year earnings. in have on

results for market. long-awaited financial in Nucor ready was and this evidence primed the are that Our upturn steel

participation active engagement enhanced including performance. our well have solidified our actions projects, market-leading as acquisitions as in initiatives, capital industry and strategic customer trade Our

our Our grown strengths. extensive have investments our enhanced earnings power many competitive and peak

earnings our capital. downstream growth primary the XX growth. with the monitor streams and diverse been continued sector, long-term, a has on reform, is we returns in catalyst of stable for strength achieved economy steel, These and end-use XX are raw segments: regulatory earnings markets the of three materials. earnings to domestic of Our U.S. industry-leading products The Tax and power capacity this all our our robust economy. are along demand. driving increasing experiencing energy business

we strength quarter, markets. evidence in sustained end-use continued see During to of the steel fourth

allocation from industry as years antidumping that as low-cost imports countervailing tariffs. is practices. field. year-ago the Together, earnings approximately in duties Finished of Through of cases import well steel the disciplined successful growth for Our this first XX%, a and comparable the market steel XX% nine by months the playing XXXX, level benefiting from also removing down restoring capital XX%. market recently imposed and Section our of months foreign supported XXX finished imports very cumulative year's from is period. are these are for the resulted nine first is Nucor's artificially impact down trade share

to is growth. priority in profitable, long-term invest highest Our

of position five the These on projects Missouri the reheat the totaling startup $XXX our additional line and rebar projects our the galvanizing mill Mexico Steel, projects permitting galvanizing included for motor a Nucor of galvanizing galvanizing nine Kentucky products. capacity rolling The remaining joint the micro of Hickman, $X.X Arkansas, in to completion $X.X and Completion lamination and our mills projects, rolling of progress Sheet produce are these new projects, and boost totaling important billion, Illinois venture construction of rebar high-strength, of the growth Ohio new expands mills, specialty XXXX. production products. implementing billion. partner, at galvanizing They dates XXXX Ohio, significantly furnace in environmental MBQ include Missouri mill long Two modernization widest a these line The completion currently are hot-rolled are The in Arkansas expansion project line Kentucky in cold the expanded initiatives in and in Arkansas and Notable mill's include hot mill through line rebar in a specialty approaching Mill high-strength half totaling mill Kentucky. We the with cold of modernization the other North approximately for two first on these from in growth automotive JFE in line in project and Four the are new band and quarter million, one America XXXX, production the mill. Gallatin, Florida. capability advanced markets. the new third successful our with micro and in range focused growth group. the will the mill. low-alloy rolling

to giving important is width band move higher applications capacity not completed, markets. X casting in Let that of of up tons Nucor we to will simply recently to heavy Gallatin access coil our the and approximately X.X more tons energy have slabs, announced about understand production is to me hot details our by Steel million chain at the a Gallatin to the up XX of project up bigger is annually, $XXX capacity and inches. pipe add X tube, do ship we tons. which The million. inches Gallatin. value-added produce very cost the to million tons. automotive maximum X Nucor It share advances value expanding regarding Steel The capacity and of to The expansion capability equipment project are further When million mill's current

proposition and Nucor's delivering unrivaled Nucor higher advantages focus on Profitable are value product chain among And our care move logistics capital technology. value is offerings the by customers is expand leverage targeted our steel on on in and always capitalize returns opportunities Our producers. investments to team's to our to up invested our taking growth and cost of objective. with

you Louisiana improvements DRI output. facility. the achieving and update Nucor the are of The ahead The and step the equipment. reliability at in areas year implementation team reliability began Now full X.X at nine improvements early nine In and actually on the I'll a results. great than of approximately months of XXXX people facility increase Nucor sustained year's of XXXX, yielded critical the process metric strategy three-pronged Steel for the by focuses tons first process million on our in Steel our and plant's is have Louisiana exceeds next plan our XX% uptime. people, more progress first to Louisiana in prior achieving work Production the Equipment at of XXXX months plant. of

is DRI in in the continuous landscape industry change, our to With that achieved. look continue Trinidad our and to we reliability raw critical digitalization including customers' in Louisiana's achieve excited established as completed Our component process plant record new heater work product That experience. them to facility with days by new very capital world to no approximately our are that excellence. at plan the We a this process needs and equipment in responsive will quarter of why has commercial which new to a of improvements, Louisiana initiative, the we continues levels, of about storage The Earlier provide Nucor's at the quality invest world-class gas other DRI progress year, our IN to we comparable by already Trinidad. best of to the team XXXX. bulk a Midrex the of forward and $XXX the of drive steel feat yard. fourth be XXX operation, material recognize in must is million achieved mega a be the world-class expected commercial module is achieving

do web tools: digital as new steelmaking as tools together who new with us thank of given bring their improved furthering in customers this Now, easier well two them input system our Nucor our EDI mills divisions consistent portal; all us with customer into information effort. deploying work digital it connections currently to allowed will like going have These customers and our for would of We websites. have versus virtual to are location, with has multiple direct multiple enable one to a to enhanced making to digital many our from an customers. new and We business

things step to forward does, base. is them As with believe with refine customer improve that direct all digital modernize customers' Nucor this big We evolving connections we continue us our and will to a for meet our they our needs. so

position. provide and Now Jim? specific Jim performance about quarter will our third detail financial more

James Frias

of Thanks, per reported quarter XXXX share. John. Nucor earnings $X.XX third of diluted

producing after-tax well natural $X.XX of charge impairment Nucor's noncash a included investment proved per related share to results in assets. diluted Our gas

materials range were diluted this portfolio, any guidance broad of quarter as earnings Nucor's the of Nucor $X.XX our $X.XX September of estimate noted the through include Impressive steel, throughout joist company rolled, to the bar including plate merchant worked for Teammates are bar, tubular deck, engineered raw have conditions our flat finished across rebar, impairment, share, per not growth to XXXX and release. achieved nine cold third high end businesses. metal your bars structural and has the Excluding strong months position been in charge, experiencing. at which and we for news products, earnings steel, XX XXXX did first buildings, our hard

our and payoff remains by shareholders' We continuing capital. results substantial focus the expect to far XXXX, valuable on wisely in we are our from deliver investing our encouraged so

XXXX legislation this year. the from are also effective became benefiting Our that earnings reform tax

rate interests, effective of XX.X% earnings the first quarter Excluding noncontrolling tax XXXX. attributable and XX.X% the to Nucor's for was nine for third months

has exceptionally the activities this nine company from billion All of diluted share. generated almost cash first per your $X flow. operating of of $X.X translated approximately cash this just Through or months year, strong into

Nucor's approximately XX.X% liquidity the our of facility, third does includes was XXXX. end debt ratio quarter mature cash $X.X at of result, strong. XXXX. robust remains credit the the undrawn the well billion Nucor's billion our at remains of close of outstanding position until a As gross unsecured revolving of and With quarter $X.X $X.X third April total debt-to-capital holdings as not which of financial billion, as

For approved we with expenditures planned projects, projects, product for amortization to XXXX cost purposes. the would capital billion. and expenditures approximately XXXX for maintenance continue Approximately savings estimate be we expect on remaining be X/X XXXX. in capital spending Based currently of is $X approximately XXXX, higher improvement to $XXX capital X/X and than to for million. estimated is of Depreciation expansion, XXXX

to today. provide are We position estimate in for that a a not dollar

XXXX to In $XXX addition months and with In cash growth, share attractive continues returns to million investing cash for to shareholders. our million the XXXX, Nucor profitable, to Nucor first of shareholders, $XXX returned of long-term nine deliver Year-to-date dividends capital total $XXX average are XX% our an share repurchases return approximately cost The earnings consistent at of with of returns shares to through-the-cycle share. million. of million to $XX about target shareholders. repurchases X.X per

steel is far eclipsing typically the record, XXXX XXXX, year-end months you strength net normal with quarter albeit influences of fourth fourth interest first quarter income a new the we XXXX billion. your of of $X.X of set to performance. impact company. $X.X continue sustainable With for nine earnings end-use Nucor Thank poised For John? markets, our billion, seasonal in that in earnings annual our to see record

John Ferriola

would Jim. Thanks, more by bit trade. to saying I about conclude like a

as Korea We The Canada for the Mexico, the to imports. and the see the are concluded the indications new clear administration's compliance believe for We serious sending both has is with this table agreement They that with As agreement the Canada and U.S., message impact. trade, long-term future a impact of the United traded and is important of leverage working. intended be government Trump other the tariffs they new earlier, can South with countries. other provisions manufacturing trade with Mexico achieving curbing trade steelmakers providing that fairer recently having and to also that approach the States as agreements are agreements is trade negotiate model having but States rules whole for the I U.S. U.S. good mentioned their a agreements unfairly about tariffs important by get United to are are countries an

its at your a to with trading in unique now happy the administration moment opportunity negotiations to hope We would most ongoing make this our be government particularly answer We relationships. of the continues questions. China. has to Our improve it,

Operator

our from we And first Matthew of will take Goldman Korn question Instructions]. Sachs. [Operator

Matthew Korn

plant. the on DRI question A

system the extent could you little not plan this needed, bit, that to a us be and what If the was putting new original to you in in equipment you're going help working that understand And was, with fixing? that now these related that to is in aimed this over what at caused unplanned it the capital? weakness And the the outage this are equipment then quarter? whatever upgrades

John Ferriola

up the with question. handling. the be it's you out. material about that I'm The be our been pointed the going you gas And it processed well about to Basically, split for $XXX Good the it in When without equally glad we're at look reengineer million. that domes some and money we it's handling material heater. could just go Matthew. material And that's the often. taken Okay, investing, be between to start to domes reported. had handling let's and more a We've failure time back efficient. discussed us --

be well fact, working much for In us. going operation, after doing our is to Trinidad extremely been very what it which modeling we're has

processed oven, on the it talked many that's We've of the because it of us. been it $XX heating material spent unit, company. I about another handling. just many a the piece heaters, area through from and of engineered way the So the we've a heating problems as through be unit. well-engineered was spent had an a will shelf million million refer an times, separate of equipment. tubes the as off the oven, in with About often an bought we outside bought. that's that frankly, to about $XX separate the We $XXX be product gas will land well And not from million

of as believe the past $XX we've year. result in reengineer, do million future, units, more of the more failures use to had in would or we've been we into a redesign parts domes will that the the to result and in heaters. and the in with processed failures be way over we So reliable time the gas industry. Basically, going failure handling there taking we're the some of similar XX% will what other cost to in go material tubes refractory of next that's this, heating damaged to passed about the I years heaters It gas chemical that processed say in a either the the

in That about asked It the had last was specifically you a Now the error. frankly, human we was, failure. that failure an unusual quarter.

our was One maintenance function. a just a while made preventive doing of mistake he teammates

have reheat put to caused electronic a we're that it no in down shut component of the trip the going and hooking long cool repair process, up this question, to unit. damage how part programs. answer that it's of in maintenance Matthew? where mistake One DRI very that it particular operations, things down, simple during those as then made way the avoid unit. matter more an And shut In And our the back time and a the is. case, to it doing it up, replacing specific a you preventive just was very, because in down your Does you to whenever

Matthew Korn

does. that Yes, detail. actually That's great

John Ferriola

this. more Let point, that me is and one I add Matthew, if may,

forward, this unit. the think improve look of we will As we're changes the making greatly we reliability that that

doing. we're what about confident very feel we So

highlights, we was as going we well, about not the be better than going failures into good, as we've discovered we of when had positive was had the many and we've to was reliable. the that something things process the furnace, to itself, itself One technology past, talked is at that early technology and to concerns on not people, the the delved had feel that equipment, internal there that we've with the was this is about that beginning. that we've not focused, in in And work we anticipated

So we positive about feel that.

Matthew Korn

helpful. John, that's very

different. up follow on this, Let me slightly then

execution in mentioned the far very tariffs pleased and of on your XXX approach with trade. remarks been the the overall you've so government's You that with

the any have benefiting we'll some XXX concern We up adjustments that some weaken to a some XXX been the which be on request year? Canada that bit can exclusions to Is government there the reports this even on quotas from you've you are could placed so apply process Mexico poised think, by made effect and tariffs I has there the see be far the started weakening today tariffs. how this manufacturers that answered certain And there. open Now through, and that the to on countries. anticipation coming or will

John Ferriola

XXX our reform, have mentioned we that in investments believe to Well, XXX the more and it to that successfully not as of X by changes times has growing tailwind What the consider our year, any made be performance been regulatory we've in course, a company, our prosecuted the reform. company. X last affected in driving years we tax over I've of performance was, this our the horsepower will this many really was past, year. The cases trade we

we we might NAFTA. will think major now, happening, as have pike, more see changes business on we they So a what our the particularly that impact to believe coming within down don't specifically be

to those times You've to it's very their to do were of countries heard the a which did do a we and a made many been NAFTA. other more on some well of From we agreement, that and but NAFTA, achieve also, has that primary we think which is steel when to can end will achieving we that improvements a to for hoping But well term level XX-year-old that one, said compete and this some playing re-examine me be XXX external have in there there We trade we are to with day believe compete. NAFTA needed the trade be Nucor have in we not including that policies compete field. playing countries bringing our NAFTA And because ahead say U.S. economy, result what the level tariffs adjustments good objective, table which made. are were level think more was negotiating countries, to way the be tariffs believe the long industry. been very to other good for countries. playing on XX-something, the we bring we we day, we within we And believe will result changes versus to happening. we quotas, objective on could only see the that with field to the to field At that balanced more U.S. was

can that that exactly to say. how the with forward the tell I'm an get field, Now trade as of at day, work with supports much not with you we longer-term it administration free we long position going is any make think, term, establish that go end sure what or up that quotas, the built around to but a in to to tariffs I playing if end short-term to shifts endpoint we you continue a have tariffs. We effect with quotas upon level a or fair positive forward. administration that trade are relationships we But than

Operator

we question Seth And next take Rosenfeld our will Jefferies. from from

Seth Rosenfeld

questions of implication couple a the its the on have flat market. the recent the of for you've for pricing outlook volatility near-term in seen just I steel and in demand given kind U.S.,

your their earlier that during products hiatus essentially intake order for QX One but seen in noted, increased flat peers have demand they've weeks. in recent a of has meaningfully

on for they tell recent steels. your and seen hike reception most Just appetite, flat for perhaps, recently can what provide us about us color a price the you've bit what of buyer to

Let's start there, please.

John Ferriola

a some on. saw around year-after-year. We of timeout see to of little period of what third to a see kind see dip, Well, take that historical an entry we the we going bias time was bit the in what always pretty what's of end quarter order

we what term in order So end to year. picking be of inventory up quickly, at we've seen year we tends short back the seen past this and also. assess it the years, And levels very that's with entry have as their

dip our a in entry rate. saw also we order So

historical entry galvanized. pickup, band solid occur. now seen to in a resurgence rate We quarter. hot on Frankly, plate tends business, and sheet order in have our also our both dip We that pretty in not did flat products, were see a we a all cold

say bit. pricing. that marketplace. guess, is down So in is I day, the There come demand. still see It the I the at has see We strong would end we of little a strength what

increase price and about to was that it I a in, guess, followed we've Our ago, was put be sticking. seems week

good about feel we So that.

very us So out both the are the mentioned script, the those we XX uptick them of we at -- many at that XXXX markets, end and confidence gives look of that go serve, the end of stable see and and products. sheet And up in are the plate our the markets either cycle, on so we'll uptick. just or are XX in that when we the beginning as going which into strength on continued I

Seth Rosenfeld

months. or other peers product? follow-up, to Does Can that have to versus well. your in bit the the of brought view you in plate us given seems Just you in on a demand have you it domestic just to import stood dynamics that supply-demand positively how color as out behavior up the certainly more give products flat do just penetration, recent U.S.? local with Plate

John Ferriola

goods. have say business, the with being oil the But we a question, been well, talking in say I energy, tubular energy that And energy. driving enough sheet so was it are into products, about country mention major I to what first the business more two business. our markets about plate of strong. can't would has impact I also than Those earlier strong. third. our drives very That's the has I sell things strong. negated obviously, Demand first in our that on been

strong, demand and with very imports frankly, So energy are plate down. being very, we being see strong, in so

So in in probably the supporting strength plate. down imports significantly the business. are That's our

-- you upon a touched little bit our You've competitors. mentioned

the of Some our and third outages during had of course, quarter, supply-demand that, the have also helps equation. competitors

strong going goes well into being as strong plate therefore, XXXX. of been see being it's see there. We continued energy XXXX. into yes, that business as the see we strength We component So into our strong. And energy sheet

Operator

Timna our next America. Bank Tanners of from question comes from And

Timna Tanners

what talk -- quite bit. to it generating. you've problem to a do you've So I cash alluded I that bit attribute to you're high-quality with a this wanted more of know very little about all your

flow of billion of without you if vis-à-vis cash $X little M&A, with -- a a your big we gas, about the buybacks, problem your vis-à-vis have flavor course, how past. much course, Listening use growth and to anticipated, it you announced certainly, generation, this within buying of just you there investments I get you're with buyback been have that thinking all look authorization about of now own you more thinking deploying organic a one some and buyback. has assets, at how world a use wanted do some in bit lot talk in are the year further free just now projects. growth you up other could you couldn't natural You pitfalls to but DRI I'm year. But wondering, organic and like, right right if program.

John Ferriola

in off talk little cash bit part the ask address and and how turn and part of last viewing the I'll the the of us organic that Well, But turn times. a you've business this it to are first and question listen, about then acquisitions say heard this it I'm we to many kick me we're over to and going of generating, him your growth to about points I'll back cycle. it Jim

in primary first That to with to will is continued. cash invest and growth, be profitable, objective. first that will long-term our and our Our it be priority continue

our Jim, to shareholders. don't we of that? some or you color opportunities, have want will to do it if Beyond to that, organic we growth invest acquisitions either profitably, add to or through mergers return kind then those

James Frias

most dramatically are talked about year's. significant capital will pipeline. say, organic CapEx number next the John just would returns the organic be And Timna, side I comment. higher But projects this in predictable typically, have Yes. and investment projects our reliable of as than year's a that

position well with our discussion we And what quarterly repurchases. a forecast and share next and those the XX dividends a just our would profile for XX shareholders is, about that to show earnings on the So XX% we combination our free today, to liquidity have will shareholders over to not based our do beyond meet expect both -- just what XX%, is through the the our it's is board continued as of cash and of a something and and the additionally at them And and whether when return, process debate things. outlook it's short months. of total in we as look for it's going term flow, be We John? what good cash it what continue. appropriate to but in

John Ferriola

last we well it or when business. of sellers before it I'd proud the but acquisition and appropriate, why about we surprise, look investing And during historically add Jim address micro any organically when at any opportunities markets, they opportunistic their this in should as new opportunities against be profitable not And some of opportunities we've different times opportunities. valuing some we opportunities. opportunities doing long-term, greenfield addition look it existing and to we you've And But invest to got we to operations, consistently I'd growth, cycle, your that as to drivers five with and grow specific profitable shareholders, has at assets. comment comment different And of organic consider present which weigh Gallatin, not capital this like know, like those what fit on comments. to we and for with look you in specific those facilities, I the come are mentioned. value And against at our when as to for as we've we them to to question strong And cash, in our just announced in acquiring returning might accordingly. our that make as growth business from stronger We history, our announced, what are That's to mills general acquire said always the to grow our of else assets be others. to our no businesses lookout be markets. and growth. existing comes opportunities look strategically would will make to that you such

Timna, our is end, was to a but to will the getting are kind buys, to said, that for like time do at on way lookout so to the it shareholders. lot do do always long-term the say in wanted the we about we cycle to of and take that been question, your we've to lately, talk point long question a cash. what greatest very capital the and a business Now way that we in vague deploy about that opportunistic question And the with continue In whatever we I this, I would creates value answer we in that our kind to relation are that. of the

Timna Tanners

it. a Well, of appreciate bit segment. more year down that that's numbers? more we grown to about generating, run current And -- recent you recent good And about expect my options. first projects think the you the term, finally the think and you of just have that that at the your But is markets, you If about, the the a good projects, point different upside in completed a when normal I there run EBIT about, past how question. little some to DRI, do that drill organically, try all us the do with spent in that of hiccups I'm lot to of and And could And you're this capabilities? Is than think Was And longer strong It's your acquisitions. little more understand be to Can about to materials when I rate I the that think struggling telling we -- second interesting. a to raw bit we have like a operating amount just know of do that I will projects the rate? above. to I we get in I years been rate? consider get the until need at to run how when environment? the us half it's Louisiana. these get -- Okay.

John Ferriola

now. -- a the projects, That's about excuse me, gone The this glad will get equipment. material with of I further take gas XXXX, built. should is it. of done and I'm on raw point the out year this We're it a side Timna. -- have the to I asked working it to the event. good equipment heater DRI, little was and being the ready timing restructuring processed the question, It talking is the the Engineering most When -- you done. engineering of of of into

downturn. taking be will We XX-day a

third Sometime complete end the towards of the fourth upon XXXX, will handling side. quarter the quarter the of we of beginning or the work the material

heater. We will gas the processed work complete the in

intention Our to more reliable. come much that. our be we'll is We think up after objective,

quality our the Our I'd X,XXX product of say which out to like performance it our of operation. at you the would product to coming of look achieve quality Louisiana, out the hours, the in rival when rivals that of Trinidad target Trinidad. coming is

We've a in of get there. quicker give endeavor So XXX a your of will us need in this people's And We the need actually there to to get row, reliability. shout-out. we terms projects got believe fact to to we're product days moment get run not to operated quality. on shout-out terms these They in our We a I've question. It's consistently, to there X,XXX team that that X,XXX to take keep this in named to an two consistent minds just give want to But project X,XXX-hour operating something? up Trinidad. and focused short and Trinidad, a safely. was exactly I rate. want anticipated. it add great the which going then And to them back you And shuts done, Timna, after you just An Midrex doing such them is I okay? job operation. for them, for stops right nothing thank and team in earthquake Jim, recovery they that did okay, a doing an got a earthquake, earthquake thing well only turned the of made And and that record, than and frankly, around. further, just down, amazing from much they stopped was

James Frias

did you well, Thank No, you. it John.

Timna Tanners

End of thinking? you're that what XXXX, is

John Ferriola

the At the Louisiana. of back -- very online we in with XXXX. At we DRI be come operations No. yes, what XXXX, will end of end will a believe reliable

Operator

Citi. of And next Hacking our from comes question Alex

Alexander Hacking

follow wanted again. Louisiana on up just DRI I to

Trinidad is Are was Are You Louisiana? I was modeled If to remember don't on that part with technology. mentioned there? think correctly, I Midrex of be of technology, at I and know Midrex some you built on the don't if they involved now on equipment Midrex built the going solution Trinidad. so. Louisiana

John Ferriola

for might a When what store XX Louisiana. material. HYL know, which operation our a We point we've okay? is in of using manual an the have use referring misspoke. to the the in for, we've a we're Midrex is to had you system, to what That's not I we me years system XX, had design. in or move When material deciding, simply more collapsed, to and we the domes used had after couple misheard years modeling and domes Trinidad That have let process that I conveyor last while something like Nucor It's material Alex, handle design clarify that, or I not a Trinidad handling that's the to don't that. been was best end, went method to of handling originally is a design. been our

of So decided effective, very Trinidad has that material the material material to with Louisiana's nothing Trinidad's at the HYL handling, do after and model been all we've we've Midrex we've the end studying, of the handling handled technology. that decided way or in to

Alexander Hacking

a restarts, plants get plants, of sufficient Maybe U.S. And It's that the of alive the X be concerned are a are from and years? macro you demand. competitor's next how then of there's into you Between amount coming like capacity question, How concerned capacity concerned the over a people -- to that's your about second flat-rolled the market of question. couple that questions the X might Okay. biggest about one not we there and could investors. you are comment. your lot

John Ferriola

you that you a it's lot Well, from that interesting say get question investors.

in terms and hearing frankly, people do of are that we. we terms of are doing. keep what in other what doing So also, We

start talking simply our to serve in this divisions doing. me better decade. be and We about company we I'd capacity. specific by script. to let the So position to not capacity a our our adding add investing capacity. some we're are saying, in very the reinvest And position we're look, in and add things said don't frankly, little of next the We bit competitive customers, to what that for our strengthen

objectives. our specific, all very very, strategic are expansion with plans being So of made

me point. that So with start let

so I'm because to this our investors. a many time Now do going of spend often. We bit on it of get hear little from we

that let I this, what So in into are some the of a plans tons adding accomplish. and little we're of talk But to the about the say, long a areas. bit them at me and look into of about market new we and products our products rebar divisions products, is and hear concerned looking things new into reality products just When XXX,XXX we're realigning into X.X reassigning our the XXX,XXX tons lot you'd you of we're that merchant, long rebar why "Well, we're and position doing tons perch we're about that long doing, adding to the market." market. we're that, in million some

divisions, shifting XXX when At about of specifically adding and or at we and long and how added long we're divisions. okay, our bar, rebar, rebar, actually tons, day, So into look you into shifting new when is okay, new about will restructured around, the things value-added and tons directed rebar into merchant new products in what products milled XX% our into actually current capacity we've products, long be the how XXX,XXX of and you the the are at SBQ. higher we're end look moving new of of SBQ,

products' additional that to example you at adding markets. Sedalia. better than better simply is, a I into our not production And We're customer demand in tons look realigning we're meet the strategy when our -- just So you into our market. what the long give of can't the

advantage rebar in So in Joseph's tons, located their is to that just a freight the a of talk costs. XXX,XXX you miles... you David operations let Sedalia that market, we in is customers. XXX,XXX between will are Of XXX,XXX are shipping tons and for Sedalia okay? me XXX-mile insignificant when tons. not that about to add at look Sedalia market, with XX That Sedalia when that XXX,XXX within that J. have surrounding literally XXX,XXX minute, middle that XXX-mile of And fact scrap

James Frias

XX miles. XX,

John Ferriola

-- XX think processing XX, I XX within... XX about miles we have of to operation, that X and plants

James Frias

XX.

John Ferriola

XX is about an is the to at that overcapacity one, And to I low-cost okay, be because from have we be overcapacity, could in the when perspective. advantage or survive exact, look way market, to within this if XX up XX miles, the bring a cost we producer. talk there

long long our products the bring lower that's okay, investments a the and will have that products. closer So customers, on objective strategic side the that us on costs, to very we we're making

be be the this his at quick, okay? I'm my I'll again, just who's up my But I've overcapacity going shaking right. answer. got again. of So brief. comes very head All over and to issue CFO, over length

us gives pipe okay, into X what a at it's call, Well, right? okay? allows -- tested different that into make grades, people with starting talk hot why wire, in to very the, properties. It's understand. adding, we're specifically, of that we we're we all a to move the the we're us which When band, is So I it. capacity It's important? gets want hot sure market. that about out thicker into And it us going slab adding physical Gallatin very band type that specific And

we're the market, a in new to into that America. be opens investment galvanizing that of The making widest galvanizing us. putting at for world new okay? the we're hot-band up gets in going Gallatin, in line a So That us markets line Gallatin it's North

with it not being every you investments that specific the that going cost, investment ones new hear my very markets. growth a organic us chain and the are objective, And up every over hit that the look one of done I is making us country. So lowering we're making or at to strategic me CFO this I getting if the very of okay? moving the to I'm or we value go around head, into other difference them that's in the think will company, through specific, either important a But some

is X And a that of there sheet, at band, all when of do the the particularly we and back growth up galvanized hot consistent just -- we would about with, to that studies look over had think we I mean, I rolled X% Now all in time. next we've years. you -- look and cold when X at market

for the look capacity you to it referred to at as that grow. there's the or when overcapacity, overcapacity you So room new

the be You you now, add of imports. the Right that's do to I the XX%, in you're to exactly XX in if XX% from neighborhood amount to that imports at year, the now eliminating being import if That of And you that somewhere we room last somewhere right, continue of to of gives basically accounted grow XX% lower you that's XX% numbers have XX%. work will XX XX%. down look got with produced should We've into the for in that down million done Historically, tons. market. a million lowering to and XX%, don't I know to import also neighborhood but when the that product domestically.

So normal growth, year-over-year reduction there's in between domestic the supply. to the our imports, room grow

I address targeted I to very that, issue specific, you to when addition along. apologize, to being think I Long this it's wanted answer, In our projects, overcapacity strategic at very they're pulled but objectives. because look

Operator

with question Capital we Gibbs our KeyBanc next Markets. will Phil from take And

Philip Gibbs

just DRI angle. slightly from different a have I a on question

module you're to in type get million of $XXX with expecting capital? second to what this a Louisiana? spending then relative return that are sub-question, it to would that take you today, you And So what for consider

John Ferriola

Jim, shot? a do take you to want

James Frias

predictable plant Phil, at really to X,XXX-ton rate. the be stable the about getting and return metrics are Well, operated and

to operating is the where X if at high. we It's compare return an it rate or years, they've last X,XXX-ton tremendous. So been the extremely X

John Ferriola

add I can Jim? And to that,

James Frias

you. I misspoke. mistake, sorry. hours, XXXX Thank My

John Ferriola

point. Jim And a makes very good

both, it's bringing rest of more scrap the million to itself. more year, look And the how we on the -- that's that value return this million to XX approach there's value have going to allows and in So with I us DRI, XX more at, don't good more of neighborhood obsolete the return. prime to In we -- the importantly, reliability that okay? it's somewhere everyone the, the I strategically tons be a But believe, buy, tons. -- DRI to know, tends that, addition buy our in what's plant scrap as we well, it

James Frias

closer actually total metallics a So probably bit it's more than It's -- probably million. to XX are that.

John Ferriola

we iron, that's tons, that's X value More. get another a strategically our you okay, DRI the And deal buys real plant out with of where allows us look you million, pig Louisiana. in a reliability. And that more greater at when the X to reliable place it of buy, million

James Frias

Yes, about John. X, our Phase

John Ferriola

Phase that. On Well, X? we've continued at look to

to personally this believe At in no a infrastructure We me to that you put have in. past, the in time, we it I of value more and process. chain continuously as continue scrap iron to recycle say plans need up a we also units be the for degrade, unit going have the Louisiana. heard But as move there the as prime as to continues alternative the through second existing is

it's And in of XXXX tracking since like began As copper has I've is, XXX% somewhere that cannot it in prime mentioned -- many out. times get grown we've amount copper the scrap XXXXs. in before, you the up

between United So of the most manufacturing the leaving even the prime computerization we scrap with the -- you our between is States. in it's get degrading, within of where fact is the products States, scrap that get nesting, that United the add less manufactured this that fact you and

of to also. think continue continue DRI going those increase I prime and will and the value increase to all challenged, of to is reasons, will For scrap be pricing

Philip Gibbs

year X uptime dramatically And Jim, payback, it a to to the potential? increased crazy that could spend would be be think that X given

James Frias

Yes.

month, on think like had per they problems. they a versus could me figure -- runs to which feel They've probably contributions when real two payback that at When plant have be that I it's routinely makes it's say year market. the strong pricing least well, years. two closer that

Philip Gibbs

That's I question a of kind perfect. of another modeling strategic a have question. somewhat And I a just then -- and have

majority Or or modeling, that refractories the should any or already? has cost have of pressures at of further felt forward? expect felt on that been the On we been electrodes bulk moving the least

John Ferriola

been think about majority felt this particularly we electrodes. when talk have I of the already,

pricing increase months. in but over as pricing, XXXX, think relatively resolved, that's the to seen been starts think so needle I has the gradual some weakening production X you'll up, of last but We've XXXX coke not beyond a much X, the in maybe as fact, in stable situation refractories. I In see -- come electrodes, been back

Philip Gibbs

And then think I last the Right been XX my now, the of -- that's of or the now just flat or bucket? said the cycle. right strength markets lagging that XX What's is question, one John, you increasing. on out

John Ferriola

Marine transportation products.

weak. that has us is we market, For do and plate We one weak. some Marine general is feel transportation and the barges. into of been market barge specifically, some our structural that sell

Operator

comes question from And Hernandez Derek Seaport of Securities. Global our next

Derek Hernandez

on pricing prime ask I of the into and XXXX just on the wanted obsolete. your in scrap forward end year for view to

John Ferriola

XXXX? mean You

Derek Hernandez

evolve. possibly through Well, end how the of XXXX it may and

John Ferriola

And into 'XX, okay.

Okay.

Derek Hernandez

Yes.

John Ferriola

in would the -- end up. you issues typical, year, come scrap will how pricing as that weather, the towards depending as determine the say is see as increasing we just seasonal on moderate And I severe it of it is.

a part a we'd we don't So $XX the over Barring I as see of upside the next increase I it radical. the unusual see any months. world, to several on scrap plan, would typically, $XX, then general in in pricing of say in over several see don't through begins the XXXX. anything major next the months And events I moderate. first this neighborhood see change, in maybe the

Derek Hernandez

And customers' follow if your I could up inventories. on quickly

give there? following about could detail last is increase market spoken you've pricing any there back Now you coming additional the that to people week,

John Ferriola

are unusual. customers. answer at when virtually Not over months, you to low. one they at are hand is When hand products, look in frankly, they refer And typically which look not on that but months every And then I -- than have the last the they X is low, we -- months decreasing, our lower with are critically to low. of on our they way X the been service-side to

So inventories to at oversupply that on where -- our where going we a don't see year-end their order pretty in this the cause inventories are feel entry. problems are customers' good about We point. any

Operator

And will Curt Crédit Woodworth our Suisse. we take final from from question

Curtis Woodworth

Yes.

moving So expand I'm pieces could more a wondering some on bit next year. you the of if CapEx just little

higher. dramatically think comment be will a CapEx you had that You

some the the And order you the are parts. XX% frame DRI In is spend year? completed we thinking XX% up would bulk us next buckets? the just could of of you So to help moving Just frame year-on-year? of magnitude, think

James Frias

you not. -- CapEx don't have terms this when individually We've probably breakdown CapEx announce But project. each project we that the told going than XX% be I year's say We're them. in be more year's. is to just higher We what a going than by overall next to is would of

John Ferriola

on. of lot lot of We're and purchasing a into with the got where projects coming We've entering forth. so costs the pace project of are equipment a incurred

Operator

would questions, or Mr. I for to closing further any to And like with additional remarks. Ferriola the John call turn back no

John Ferriola

every Okay. shareholders, appreciate you. to a our customers, do that to day confidence and to for we earn that place in and all every trust you more Thank it build to team day. support. The like in in interest our Nucor. will like solid continue with we for say I'd you appreciates your a To to I'd the Have teammates, order. you you XX,XXX you quarter. Thank the your And my thank work And continued for thank and Nucor, safer great hard profitable another Charlotte Nucor. to

Operator

and today's conference. may you And this disconnect. for you your Thank participation, now concludes

Nucor (NUE) 18 Oct 182018 Q3 Earnings call transcript