NUE - Earnings call transcript Q1 2019

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Operator

Good day everyone and welcome to the Nucor Corporation First Quarter of 2019 Earnings Call.

As a reminder, today's call is being recorded. Later, we'll 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 risk 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 we 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 related More SEC's on and risk subsequently filed may Nucor's in to be available latest website. XX-K uncertainties forward-looking of any as new as and Nucor date The made this in this or either events forward-looking future them conference not information, of obligation assume otherwise. statements a update result call speak only to does

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

John Ferriola

and us also our Chief Good today members Nucor. Chief earnings Ladd first for Feldman, Frias, Ray Merchant Other quarter responsible thank on including responsible Products; Products. Topalian, Materials; Rebar for Craig Nucor's Raw Bar Jim Joe interest Sumoski, responsible Napolitan, responsible for Officer; for afternoon. Digital for call and Hall, Utermark, team and Fabricated executive Products; for Tubular the Officer; Bar Dave and in Thank of joining call are Plate Beam responsible our Construction our Leon Stratman, Products; Engineered you Products; you Financial and for Sheet Chad responsible for your

resourceful key years and recently, our thank Business our continued announced which success products served Chief Development has Digital dedicated exceptional service steel Nucor, for years to come. Joe our June Joe roles throughout your also Nucor who the role and retire you XX you positioning been and this played plan leadership, in for as to materials, steel, more Joe, have Executive a in Vice outstanding raw this in Joe contributions an than Officer. President of as of with Lastly, Xth to Stratman from has included Nucor after career on has made Nucor. leader key most businesses.

Sheet you will the of you you at this tubular joint leader success Nucor behalf you in in the best look his achieved and years in XXth, management President Executive and Jill sales and the serve Bar want dynamic Engineered to our and XX,XXX teammates, Ray have wish on logistics Hall while to Napolitan experience Hall products. role as your that new responsibility Nucor's operational know will with Products. personally life. of roles. promoted to products senior for that XX team as missed very and her building be Emily we will of Speaking in President continue and Ladd Ladd for we also will forward of We and chapter begin May to Mary assume Vice group, assume will Emily Vice products. responsibilities is certainly be EVP Mary tubular initiatives Executive ventures. a on as Effective continuing his Slate digital that

Before for our we is team. want emphasize strong priority safety first the number one to Nucor results, I everyone quarter that on discuss

at incidents industry While outcomes, Nucor every our zero consistently goal lead the safety remains we in facility.

Gallatin site VPP be the congratulate Education a Gallatin and XXth recognized to and like for And we at as Star by our mitigating working Division also Nucor only the By identifying keep I would I will safety, Nucor Training. is working our drive incidents. safety no continuously way, Site to zero We Kentucky. I'm this have of to by will while success. together, on is goal Kentucky's by being this of thank goal doubt designation that That mindset achieve and the achieve that our of the awarded Nucor teammates of Commonwealth risks. can the subject

is division outstanding program. two continuous similar companies a year are Each going management Gallatin this health Nucor qualifying the evaluation. to achieve you maintain teammates For divisions to must VPP safety the and order programs and to These Partnership status, the safety is my VPP at To Voluntary our starred are and put safety recognition. meet and continued impressive or systems. criteria and Gallatin by teammates maintaining OSHA program health Kentucky's onsite VPP improvement implementing XXth an VPP who who Protection first, After extensive to all must again process, every to day. standard in on achieve Nucor rigorous goal demonstrate Congratulations government's familiar, not forward. thanks and designation of of this my achievement the those federal undergo

set towards for to all the continue lead and outcomes manufacturers for higher all. the Let's way bar safety better

our Moving earnings, most products bar Several industry. mills. by first again result, beam commentary bar, XXXX steel in plate, quarter of joist diversified in earnings gains capacity Jim our the North more our shortly. lot improvements detail of our first and to results quarter America's the achieved of also and first been and Nucor products. of piling will outlook about U.S. demonstrating buildings, steel contributed significantly and Frias year-over-year a most engineered businesses our metal There's producer and deck The merchant expansion plans year these downstream compared of announced as on steel quarter that our prior to include including making value achieved steel over discuss the rebar, position the products. operations improvement the significant to

cost, plans achieved capital our proposition strategy and While will projects other shareholders opportunities focus We we is that capital will deploy participants effective disciplined being by superior position to only the on growth our not quality laser that Nucor when customers. on both our entrust speak of shareholders. making for strategic stewards is our deliver industry, and long-term Sustainability service high identify profitable for in growth us. create investments to to sustainable. by Nucor's value Nucor's return of to in value is the we driven Discipline a that

to performance value pay creation. return tied are compensation our on directly equity capital aligning on plans return Nucor's Importantly, and senior with and incentive performance, management

XX rolling Steel Nucor six announced begin quarter. We new Arkansas, this anticipate online that which projects will came growth operating first at significant specialty have year mill these projects. during the the including of We cold

rebar to We With will competitive X,XXX expect by begin added projects the this create be to expand and direct at X,XXX capabilities respect projects least the position jobs. jobs these indirect projects operations of our bar to and steel the three rolled believe projects of value approximately merchant operations three year, and a long in operation other all projects XXXX. flat XX we products improve the businesses. These six set the our of

cold more Steel that Nucor Let summer. up me new rolling will Arkansas two provide others start and at detail about mill specialty the this

new Steel rolling a successful Arkansas our startup mill cold First, specialty March. at in Nucor had

both expands oiled to high pickled motor product as startup. already delivered well Arkansas our the reduction alloy and on processed steel successful continues Nucor very produce ramp to cold to cold-rolled team have prime fully lamination, to entire strength as a capability high-strength We flexible product mill up. production advanced Congratulations and and customers Steel low This products.

other our track pickled It are North upgrades start well The installed mill quarter. I second JFE in will expands rolling America. The up our Steel bar the we reductions mill galvanizing also up structure projects in galvanizing use. will later widest serves. Kentucky, facility Nucor micro new galvanized hot-rolled rebar begin our in our other mention Marion's with the These be permits leader expansion project XX the August and serve to have a is mill Nucor we in on as energy Gallatin in furnace in galvanizing and it mill for the start anticipated line and and Marion's new markets. mill. recently Steel newly coils Steel construction in in inch to venture Three in position that delivering the the improve merchant market rebar to oiled significantly Mexico, line the commenced producing the cost in all joint Florida automotive and running July Frostproof regional Illinois and micro mills value-added third, should to is And new rebar expect and reheat in-line received coils that mill third Missouri scheduled in on sheet our XXXX. capability

high-margin to we is plan of in strategic quality, to state-of-the-art Nucor's targeting produce but volume, specialty Brandenburg, This a cost. position In are reliability in in new Kentucky. grades. mill will We United plate plate as including also a there market, solidify mill the in to terms new March, just start the U.S. us not and products mid-XXXX. the consumed move The up a build the XX% a plate announced States in leader ability give of

on-time delivery. J. cost serve a the David the and Joseph the strengthening we site is with be market, graph will lower country's superior that costs business. abundance covered Our plate consuming largest is low our Ohio region of on our in by freight well with to scrap located our customers center ability in Further, River

for We are this performance our At powerful we have Jim deliver will and partnerships make with entire on remainder over investment of the done as provide enhancing about pipeline as we time by success growth the success this specific Nucor Jim? five Nucor teammates. providing achieved our excited will greatest decades our leadership The our range projects. Nucor, has first positions performance past value building detail we about shareholders in customers and delivery. customers, Frias powerful have the results. build outlook of product and market successful more by well now that more can in as year. this our quarter quality, unmatched cost, we

Jim Frias

in segment. was of to a on XXXX reported the material Included $X.XX Nucor gain quarter investment our earnings in an share diluted per John. of diluted results first sale benefit these the raw of Thanks share. of $X.XX related per

performance of per share. exceeded gain guidance this to range Excluding $X.XX diluted quarter non-recurring first our $X.XX

our John to Nucor from benefit model. continues diversified As business discussed,

cash Another key strong Nucor's flow is strength model cycle generation. the of through business

hand. We also of $XXX $XX ended growth. million. XX% dividends stock teammates major over returned cash XXXX sharing higher to quarter even Nucor's even net was during $XXX to were as profit billion in capital allocation, the for the progresses. funding in our of long-term spending long-term of $XXX Nucor the as source net accelerate of million, Consistent approximately million quarter stages and in and million million First $XXX earned after for the a approach growth are we million, Nucor's therefore of quarter were of our repurchases in Inventory while just quarter the year-on-year. almost We about operations executing by $XXX the strategy income profitable teammates was on $X.X our cash provided current XXXX. with cash sales shareholders disciplined quarter, capital expenditures year capital expect to with XX% other uses investing of from

condition financial remained we For expenditures outstanding with capital the continue of will total our year total debt strong full Nucor's billion. that estimate $X.X approximately $X.X XXXX, to of billion.

ratio the Our end XX% debt the to gross was capital at of first quarter.

quarter $X.X the is unsecured of and undrawn credit April quarter It related mature $XX.X that remains first an $XX.X included ago costs $X.X investment does revolving in worth is projects. million million million from in noting pre-operating facility and of first quarter. strategic That to our Our results the start-up billion not increase XXXX until XXXX. fourth year

earnings the turning outlook, we to robust Nucor. year for to XXXX Now expect be another

the to continue by encouraged use domestic overall strength and We of markets. our be

markets due power Automotive In the decline in completion improving demand meaningful grid automotive the One major projects of we XXXX. markets year. two XX decline a market comprise the fact, is OEMs we the suppliers of we seeing for other and transmission stable expect or see to XX in extension that monitor. end-use to

the we the will new to volumes customers anticipate decline and shipments it in in automotive grow these be core XXXX. moderate that unit actually will However,

are of appears which largest the on applications investment. the to the the in products in solid the sale non-residential another Earnings XXXX course, quarter demand are to year of set construction, excluding be source second first quarter XXXX. expected Of for of the for similar gain our

over segment improved environmental We plate in conditions the linked steel and significant quarter performance due will The now plant. to second performance margins in to as our call first expect you and back to offset reduced the improving expected John. mills. for products expected weather improvement activity. construction the is in pressure I DRI the seasonal further patterns similar company. quarter mill quarter quarter as iron your second typical quarter in The sheet segment raw for achieve the products steel decline interest structural weakening margins in the margin first Thank at over material turn our compared our of or is to segment the to benefit direct

John Ferriola

Thanks, Jim.

level consistently critical long I more the importantly successfully playing that demonstrated to continued trade. and underpinning to on field, questions, compete the world. take a trade we want fair Before any and when remarks Free operating make is to our Nucor we few a success with a producer Nucor about customers. maintained and has both in steel can

prosecuting the been of remains focus ensuring XXX on Section much has trade level to While playing a steel cases vital field. tariffs,

company, enforcement rules-based U.S. and continue XXXX domestic a reason, Nucor there we trade another our the Mexico China, material be has as the bring that applause benefiting are fabricated steel than International to is significant economy Commission effective going performance years, industry to improve injury the steel the new the that in to exciting and indication U.S. made that recent recent More determination manufacturing contribution online. United less for entire of year projects of Trade sector. sold and For structural value. into of fair Canada is by from subsidized imports States the at on reasonable

would We diversified day business of thank industry that over you to strategy and will us for cycle. like you the that pursue way outperform valuable teammates for profitable to we Nucor with do earn economic trust and with happy best appreciate than do and safe And continue opportunities you be to thank place We profitable and remain Nucor's more enable our order. finally, capital. you our very investors the to continue build us work entrusting you will will every more the to thank would questions. XX,XXX our your you Operator? customers. the continue growth to execute now answer a Thank model to confident Nucor. we the in course the to our our also to every to you to I say it for We

Operator

first And today Sachs. Matthew question we'll Goldman our [Operator Korn instructions] for take with

Matthew Korn

one I've little got bit two one longer near-term for term. you, a and

mentioned last particularly profitability delays excuse and expectations First potential is to seen better weather year patch-up volumes and And look the thinning offset is your structural platform quarter? then in Mary sheet do plate been different trade you up? just should and across quarter, ramping relative mentioned And think you as structure you question do the could steel that what opportunity any next segments my and across to How for is second there margins much is where against these by revenue lot. market rail, of me now on bar. that on the is in a John how fabricated How represents, from of today seeing imports? terms that and case. pressure increasing that right sell about structural Thanks what bring a tonnage and you Nucor, that you first had

John Ferriola

I'll first quarter. the going Well, that's the volumes tackle second question into and on first

mentioned know, pretty demand You that we've consistent. we see

be volumes particularly couple entry but mentioned. expect on band we marginal hot in about maybe last side, the growing products as so you In the we -- in we when over second the sheet fact, to at those little bit good go the quarter, the a on sign, the order that our look growth, small into of side, growth, weeks, a same,

a might a It We improving. the long wet little on to that are businesses be spring. winter. We bit better volume now. see had downstream correcting weather seems based a had Our conditions very

see pretty we in quarter, of our going say, businesses, be but a consistent. second So, going bit are pickup might volume overall, into downstream to our the I I a would think

tons biggest about it being very us, of lot violators hurt outcome and that our we're and the a products about this final that's a all, product. that and position, a we year it this a and products final and I you been we've coming China that businesses. good the hurt three Canada, we of sell trade dumped could we unfairly in hurt, that into that of steel sell first million from result fabricating we truly laws second -- a structural into That's our preliminary yet, of in X illegally tell don't our news we fabricated on have beam, XX% determination. so Mexico be a positive traded a remember, will seeing get In terms on think we optimistic of construction the of question, this this demand, will in. pricing are on is ruling

big So, are we're going to if confident it plus, outcome, get outcome. positive a a we see as we we positive get

We will to just happens. wait see what

Operator

with hear we'll Jefferies. from Martin Englert Next,

Martin Englert

a had provide for implications any bit flooding the you cost maybe it for if given little Can of has the input commentary recent the material discuss has on system, how and river this the your Company? temporary sourcing impacted

John Ferriola

Overall, we've we Nebraska our in on division. flooding significant impacted was through seriously where done quite I'd the the say facility plant well had most flooding.

impact a lost a the of had did of to materials there coming job been impacted have had the an general, the We much bridge anything we tell out, much in. hasn't plants, really a that haven't of Mississippi, transportation river with terms we impact of got going good bit the minimal in at flooding, shipments the an but nothing when there out rail in town And coming but The pretty our team materials and the out of I raw on of terms for responding and been too a has Norfolk, the or issue, talk We use to raw river, in about all. that's crisis. either if in in we little over you great of course month.

Martin Englert

or the could could growth be called provide you something else? did highlight also And more within the something for internal other, other detail detail this? one you based around steel focused but it I initiative, on release, if thanks segment the Okay, out there. would growth And the domestically Any core opportunities.

John Ferriola

we able to comment on. mentioned the Anything of what that opening we will was be comments, in not specifically outside

Operator

with Deutsche question. Bank Chris next has Terry our

Chris Terry

team. and Hi, John

I touch expect on just you've conceptually, have comments follow-up the on potentially growth a still next maybe be you would the wanted one and the front on on so comment projects to thought a for that, the potential know volumes, around touched widening, quarter, about, that guidance. conservative more that these you spreads if could to are opportunities, you flat on that I to spoken I independent of appears guidance just up. the would last other that be the ten the the secondly Just

could Just comment you if that wondered, well? as on

John Ferriola

of a about of it's what First outside mentioned, statement. comment the opportunities growth our we all, on potential general

We opportunities our grow looking to good are Company profitably. constantly for

take me drivers growth that great as the pride profitable times diversified of constantly mention opportunities and five value the we brings those that grow are America fit our for profitable heard think to We sure, drivers most to our many of growth to our on continue and we're our the diversity Company lookout You've steel shareholders. the and in products fact customers of steel we in and North that Company. for great five

So of I for established continue expanded we've with say will to our five criteria met that we and anything profitable look really can't more the but opportunities growth, beyond that, in specific. there, that drivers

of be will this said we going similar and time. what we was quarter, they In can that's into terms the all at second earnings the I really say think

a rapidly. cyclical in very change are We things business,

the the quarter to be the how and we we right right now. the earnings volumes see see see the that's about we As earnings, similar second now, be same, it view we to

Operator

Credit with from hear Woodworth Suisse. we'll Curt Next,

Curt Woodworth

if it's about and the what going been capital first look $X.X trend was that pricing of I So, understand two receivable up basically to and management. significant out but is did just is market, the would could a year pricing you address you're a seem inventory, there working to cash last working in sheet that If it to outflow, Company. given what's billion which on the just it given down where ago. on a between going years get just back I the is wondered back at accounts I capital question opportunity

Jim Frias

This is Jim.

that answer me question. Let

days go are conducting. with commensurate up hand. of we receivables to of Our up business in that volumes They on and went inventory the of didn't volume terms

So, extent up, were to average the up. went prices receivables

We to days collect over are receivables. still collecting our just XX

but prices to side a fall weak operations And get from liquidation. XXXX, down. were benefit. you opportunity year to generated but scrap prices as strong a inventory fall And steel collection the we cash the had think we you're if not of of course very shorten of pretty further, prices receivables, there's right, dramatically, earnings to capital a working fact when then, fall in So, prices back fell because if down, we

do when So, low the overall bit our gets a inventories lower our level. lower of and cost inventories volumes activity all we of is business of little course,

mean, shrinking So, working there some severe for an is yes, downturn, a capital. there -- is I opportunity

several just Now, last if whereas we the million. first a earnings of year dollars, working maybe neutral, was in $XXX happened was look on drag at capital what quarter, it million fairly hundred

whereas was a more environment is So, seeing of with it for year what we're of margins. working expansion right now last building stable capital,

Curt Woodworth

at year Right. But that, before a XX, if days, finished XX, you inventory XX.... at year I look last at XX, you're

Jim Frias

year Yes. and be We little at capitals was middle end our it was quarter it's there as go with also some to opportunity. year. were be of to about we been We iron, there little I view heavier huge shipment this with talked wanted a delay would supply part issue customers with working year still as little the and bit the a a down the we chain, materials. bit, than raw -- working an that working through not relatively but pig little we've a of so, and down of flat a on

Curt Woodworth

growth engaged two could you tons that year million this you're you. helpful. if on the and sort just update auto ago success be then sheets I investments OEMs X side, these amount pretty good for to some about the Thank on or of investments? Company And your of year with targeting know, I on of follow-up or just making automotive. gaining the either John, share. a auto auto year think you already of on would has with us share new you're just Okay. Can one were talk the you expectations galvanizing had now with last versus

John Ferriola

we Well go declining is year -- earlier that we markets we of statements the this in the one mentioned that as into it is automotive.

level We around the in down compared markets. expect XX.X% shrinking news grow we is, our XX.X% continue somewhere share good to it But year. XX.X%, to last to market the be

larger of We piece pie. have a smaller a

You're us grow lot share get another continue allow us our project to that's in the will to expansion making would one right, would a market those the and that we're of mention mill investments going specifically, to that's areas, Hickman. I cold at I Gallatin project, the mention into automotive products.

we to So, share our see automotive. going forward, market continuing grow in

specifically at we about by million currently, You end year be and annual operating about do see year tons million where year X an million a at I of X us tons X.X the of this pace about year. asked of per end rate tons of think and we'll the we'll about do a this by the year,

going about excited all specific to So, virtually companies I'm into what will we're business not about we really I basically OEMs and but the participating say penetration automotive, give excited XX are today really do we're with of that. made names, asked we with, the that we about you

Operator

Merrill with comes Our Tanners question from next of Timna Bank America Lynch.

Timna Tanners

but you us, X look volume I look looking If the most discussion me and we've the told markets I'm category, just into flat and hoping the on are you end that flat. be got first half of quarter, substantially So, you it, you second your will auto year-over-year, your been connect of declining having. us going gave then at at dots I QX was XX.X, the help are last if you're up million year, you but as nicely call it tons, volumes, the let's at can

side, something Is missing with we're according that? not that. me demand? help struggling customers their to understand the understand to just weather I'm you So, buying how it on Can are

John Ferriola

Well, a couple of comments.

between lot see one, on quickly there happening. we first as coming today, they are to exactly good of Yes, into of a a example of levels, remain lot and the correct the to end your the service going year. they down in is and getting lot is center from that, a the off are centers, things continue amount sales still low demand give One inventories things work numbers last of strong, would you market pretty The last I of is point a service but

taking see of you go activity So see half of first that's place, some impacted weather, we as we the moving forward. I the up the that as said, year, now,

as other I'd our coming you what's to as is, The to see know, customers want down, to happen we with need off, going you give issue, to scrap. tend hold scrap see the we

were for believe happen see what's So people scrap lot they be to in demand, -- lower be I to year-over-year down, going waiting of there's good, believe and certain. there continue a is, continue I are pent-up continues basics, areas, on to the personally remember demand last than and in imports other year to but they to be

XX volumes in pick of statement, day, the do go as look the we that's the you think the start of in overall being in up second we end we -- overall point, the some of that believe we were when it the the that talking the can the as year volume see the to through we'll at the half we consistent opening year-to-year, through. So we year, cost they pick hedge the half. their loads got get At they'd some up tell in their I will said at second about year, last still these the on our optimistic going are because and I of very end-markets, way all marketplace. the about there some that make the heavy a they customers what's bit ahead buying, heavy of we optimistic working little inventories our XXX, in they customers they time customers thought, point talk got final of would to is are that is very And

what's the customers and that of the lot markets, the I I happening is saying I some into we that are in Obviously, look Timna, downstream and we out end the of frankly, missed, is, Metal markets going things get and a things fabrication a at that in we in feel in so that of but point many of market at participate for Tubular. our look sell really by one buildings think and So what day, would analysts on the markets. rebar at I often those good

a in we of in feel the have those see markets about markets. being still -- in optimistic markets we good what's So, steel as those sense that those markets demand those happening well in and our in we

Timna Tanners

but Okay, maybe that... helpful,

John Ferriola

connect the I don't if you know that helped dots.

Timna Tanners

more Yes, we've going but the on answer, next despite I'm I'm area still down price, so prices same hopefully in know, spot, repeat on been confused scrap, here, and they on domestic the talked I import of put mean, if why domestic but the landed down? confusion, charging you going to some are side rolled so the myself I'm and not imports about are maybe of helped, or up demand price, I but but mills to or I at but have but I about why a flat are below recognized the demand going in have the good volume, prices mills, is

John Ferriola

buy way sometimes the specifically start people market market. is there are they've I I one of have to competitor, mills, way any into some would coming back got even but you you I'm not market, into might know, they've going the say, to up to speak that earn new their the You into give the reasons got to when their

issues up we mill, in in and that's -- scrap again or there a back, pricing. So you looking tomorrow the on to more entries a some better you onto be forces in new force they on little so bit and of leads pricing my deliveries -- start the I that marketplace. Obviously, you're when be with a little to mentioned by bit answer, be first mill so that price buyers to see so market, hold will going new with of expectation forth, where us gain, an a priced part there's the obviously the market to a more quality some a going and drag restart lower today, bit into down, is as such that responsible the that that

going is and you when be tell slightly demand but even that is pricing will case forward. a go down, to always not at following steel to that on and look as metal think it's the demand, we what's pricing the margins So, is maybe happening that strong, of the we going pricing if volumes are fact improving down, I relative good, scrap exactly you going

be year? last I'll better year. tell what, most a the still we're we're answer of one Will as saying I about in it I'm really good be compare by things ten have than the full had year, a it'll market lot -- been not, for year, year. it's years, a be we've of year to is that good Maybe a the asked I years sure, going will is a to pretty the good as and again, last often So optimistic last how you this do that and this

Timna Tanners

are ore and just the elaborate detail margin DRI, you if I iron going question Okay, bigger because talking I last not second just could through, half the outages, talk that is, if one, had so helpful. that one in had there be but for there call, segment, materials already or going know think squeeze bit Thanks. a said more a little wondering If could about a bit being you ask raw can can more the to what's that, I up, is going a just in adjusted I now about it to more? picture little that a what I'm you're able on prices little you some on the you pass are last in of and

John Ferriola

also. I The issue When been iron plus pricing must very sell it's on has operations for the performance in we our DRI talk coming use raw Louisiana, said you been very, an well, our as is is. home has issue about the for side, iron would material DRI, fact about our Pig okay, with been set that be running that there. to down, and pricing just the pig selling to specifically, plant that's and what going down adjusted value everyone's the our price assume, not mind DRI so mills, DRI talking you you're

of days, have down. it do do was days So and it a issue, short biggest that we We going major about had think about pig a have take -- that half. XX offline of that fail, not outage was to we outage, a it been was the things impact did across in is weeks so the the not We basically the to it first XX but valve all small where it that's down, have a I we did service. pricing the a not fact significant going did out was impact iron is pricing DRI

news Now tons X.X of to bear side, X tons of our pig that's DRI mind buy million million produce X.X that about tons iron. we DRI, bad million but we in on about

bananas, what we of on the the bit. tomatoes up a lose little So kind we on make

but on a nice it's we iron. situation do get better it where so and DRI, the nice know, -- the it's on You the on the price hedging pig to lose

year, issues down do, the to one systems be, areas. the that will with it's major an deal outage. one that. to going two want and the will to a probably do will a did we control the beginning on to be furnace redoing year outage. that the had that's that those second be reliability it's the process but to past you to we've the material issue the doing always -- that know next down right side. reliability It major our the major more probably be in days, of But in to -- that's will August, will be problem give with we're and also and efficiencies. to in mention big update improve for And the probably refractory, gas as of the going early We vessel, is project impact so end we -- work be they're issue the was the handling second half, there to have Now, more that repair operation, to side now, a during making, that of material our have we've middle to and XX repairs toward that not in we've point -- end was mention be we're heater XX-day next major with our And you had the make the to on and there XX-day on be did refractory, going had August going toward past I everyone large will handling which number the and to doing is we another

Operator

question with next Phil Our KeyBanc Gibbs from Capital Markets. comes

Phil Gibbs

just So asking. was further question go bit what just on Timna to little a -- to

as at materials including being $XX the million So for the profitability looking million gain. $XX correct raw am I the division in

a that the for number So pig will is there, you I that like and number, that iron be it even the ore in working some and negatives in center core off business which now, -- is the million, this to the cost the for would DRI position, should going the isn't was about that cycle? or be but quarters saying of given over but iron cycle, strongly positives this asset years, some when the just through of course and to the times there likely that, last a is be a going we suggest $XX weaker are DRI over second expensive quarter essentially -- of had that I think results we've you're some be several the know loss we've be to you're negative had rectify should will thinking

John Ferriola

as as against up. it for when it I the pricing starts did iron us, of then a provide the we more for and iron beginning think earlier, a I'm hedge of correctly when and the down, down. said one the facility I profitability a goes reasons not center you Again this that of said up go cost pricing does will balance changes go was values DRI it sure it'll one be up pig you us pig at said and to

will when So, pricing pressure, under times pig iron yes, reversed. be there pressure, times the but will under DRI also is be pricing is there it's because that

a to prices up -- going and iron down. goes it's it's change So, as pig

Jim Frias

scrap we for it perform pig by get to but as pressure did yes, quarter make but perform tighter. spread not not as it's And John, There's to pig be. last prices benefit used the did much are prices. that's there there prices iron about as so first as prime there, getting there said, as having well keeps of and iron operations probably the slightly DRI John Those earlier not it's most as iron worse really it in second -- money the in quarter, ore about DRI to well year, -- it'll about much so also the not on and

Phil Gibbs

Brazil I Is are you suppliers pellet mean get been in something and or I the okay? because from because are availability would there terms main that Europe, is of supply issues likely stream, from some you tightness right supply seeing pellet in assume where some the any now that's at.

Jim Frias

about It's that. definitely doubt getting tighter. There's no

had You've know we've heard reliable remember a so but we -- a other one we of certainly are buyers, several okay, and reliable problems are Vale suppliers. largest has buyer are okay, you and payer, Vale we've had and had, about a the that very that long-term the we with relationship

what tightness our although, needed in operations we any had have running. issue is getting a keep So, we not there to

Operator

over That I'll Ferriola now will conclude additional for session. closing any question-and-answer John conference remarks. today's to turn the

John Ferriola

Nucor thank you interest finally a to teammates safely. my for it as in thank most appreciation Have great close Nucor. thank partnerships build you our me powerful results. what and want you firmly get express saying, and for by We our all always, you to let Thank day. customers. I for importantly, So, can say Nucor that doing shareholders, And for you to do believe together and powerful everyday again, our your to we

Operator

your That will conclude Thank participation. call. for today's you conference

disconnect. now may You

John Ferriola	Chairman, President and CEO
Jim Frias	Chief Financial Officer
Joe Stratman	Chief Digital Officer
Craig Feldman	Raw Materials
Ladd Hall	Sheet and Tubular Products
Ray Napolitan	Engineered Bar Products
Dave Sumoski	Merchant Bar and Rebar Products
Leon Topalian	Beam and Plate Products
Chad Utermark	Fabricated Construction Products
Matthew Korn	Goldman Sachs
Martin Englert	Jefferies
Chris Terry	Deutsche Bank
Curt Woodworth	Credit Suisse
Timna Tanners	Bank with America Merrill Lynch
Phil Gibbs	KeyBanc Capital Markets

Nucor (NUE) 23 Apr 192019 Q1 Earnings call transcript