Nucor Q3 2026 Earnings Call Transcript

Nucor (NYSE:NUE) reported third-quarter financial results on Tuesday. The transcript from the company’s third-quarter earnings call has been provided below.

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Summary

Nucor Corporation reported its strongest quarter in over three years, with approximately $2.3 billion in EBITDA and earnings of $5.80 per share, driven by strong demand and contributions from recent investments.

The company set shipment records across its steel mills, with over 7.2 million tons shipped in the quarter, supported by investments in new mills and upgrades to existing facilities.

Nucor’s strategic initiatives include the commissioning of new sheet mill projects in West Virginia and South Carolina, enhancing its capacity to serve the automotive market.

The company is advancing its environmental goals with a CO2 capture project in Louisiana, aiming to capture and store up to 800,000 tons of CO2 annually.

Management expressed confidence in future growth, citing strong demand across various sectors, including infrastructure, reshoring, digital infrastructure, and energy.

Nucor is targeting organic shipment growth in the higher end of its 5%-10% range for 2026, with potential for further growth in 2027 as new projects come online.

The company generated $1.6 billion in free cash flow in Q3 and returned $629 million to shareholders through dividends and buybacks.

Nucor’s balance sheet remains strong, with $3.6 billion in cash and liquidity of $4.3 billion, supporting continued investment and shareholder returns.

The outlook for Q4 is stable, with expected earnings in line with or slightly higher than Q3, despite seasonal volume declines and higher costs.

Full Transcript

OPERATOR

Good morning and welcome to Nucor’s third quarter 2026 earnings call. All lines have been placed on mute to prevent any background noise, and today’s call is being recorded. After the speakers’ prepared remarks, I will provide instructions for callers wishing to ask questions. I would now like to introduce Chris Jacoby, Director of Investor Relations. You may begin your call.

Chris Jacoby (Director of Investor Relations)

Thank you, and good morning everyone. Welcome to Nucor’s third quarter earnings review and business update. Leading our call today is Leon Topalian, Chair and CEO, along with Steve Laxton, President and COO, and Jack Sullivan, CFO. Other members of Nucor’s executive team are also here with us today and may participate during the Q&A portion of the call. Yesterday we posted our third quarter earnings release and investor presentation to Nucor’s IR website. We encourage you to access these materials as we will cover portions of them during the call. Today’s discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws, as actual results may be different than forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor’s SEC filings.

The appendix of today’s presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, let’s turn the call over to Leon.

Leon Topalian (Chair and Chief Executive Officer)

Thanks, Chris. I want to begin by recognizing our 33,000 teammates for making the summer of 2026 our safest summer ever. Summer brings added safety challenges, and our team met them with focus and determination. That’s something to be proud of, and it reflects our commitment to the most important value we have: safety. And as we finish the year, let’s keep looking out for one another and make sure every one of our team members goes home safely at the end of every shift.

Turning to our third quarter financial results, Nucor delivered its strongest quarter in more than three years with approximately $2.3 billion of EBITDA and earnings of $5.80 per share. Jack’s going to unpack our results in more detail, but many of the themes we’ve highlighted throughout the year continue: strong demand across key end markets, growing contributions from recent investments, and federal policies that support a healthy domestic steel sector.

And with the capital spending moderating as major projects near completion, that strength is increasingly showing up in Nucor’s free cash flow. We also remain committed to meaningful shareholder returns, returning $629 million in dividends and buybacks during the quarter, bringing our year-to-date total to nearly $1.4 billion. Operationally, the Nucor team is executing exceptionally well across each of our business segments. In our steel mills, quarterly shipments exceeded 7.2 million tons, setting another shipment record for the third consecutive quarter. This would not be possible without the investments we’ve made over the past six years, many of which are now online and contributing to our results. For example, the Plate Group set another quarterly shipment record.

Brandenburg shipped approximately 240,000 tons, or roughly one third of the group’s total shipments. The team has done an amazing job bringing the mill’s full capabilities online and advancing customer qualifications. The Bar Group also set another quarterly shipment record. Our Lexington Micro Mill has had a very successful ramp-up since coming online last year. The team became EBITDA positive in March and has built on that progress, reaching a utilization rate of nearly 80% in the third quarter.

We’ve also seen very strong results from Kingman, Arizona, and our micro mills at Frostproof and Sedalia, as well as our upgraded Kankakee mill, helped to deliver our best merchant bar quarter in several years. In steel products, we saw a significant improvement in quarterly earnings. Higher shipments and a notable inflection in pricing led to margin expansion across most of our major product groups. Joist and Deck had a standout quarter, with shipments up about 20% and realized pricing increasing by $110 a ton.

In raw materials, our Louisiana DRI plant has begun capturing CO2 emissions for transport and storage through a project with ExxonMobil. The project is designed to capture and store up to 800,000 tons of CO2 annually, supporting our greenhouse gas emissions reduction goals and strengthening Nucor’s position as one of the world’s cleanest steel producers. Congratulations to our entire team in Louisiana on this achievement. The strength we are seeing in today’s domestic steel market is being driven by healthy economic conditions and broad-based investment across key end markets. Nucor is benefiting from these conditions because trade policy improvements over the past decade have created a more level playing field. In particular, vigorous trade law enforcement and strengthening Section 232 measures are allowing us to realize a greater share of the strong demand environment.

In the U.S., finished steel imports are down more than 13% year over year and down 24% compared to 2024. Fair trade supports strong markets. Unfair trade distorts them. However, import volumes have been increasing in recent months, including a massive surge from South Korea despite the Section 232 tariffs. From decades of experience fighting for a level playing field, we know we must always stay vigilant. Therefore, we will work closely with the administration to ensure trade measures remain robust and effective.

But make no mistake, demand is very healthy, and even as imports have crept higher this year, domestic shipments have risen in each of the past three quarters. Strong market fundamentals and favorable trade policies will continue to support a positive outlook for the domestic steel industry. With that, I’ll turn it over to Steve for an update on our growth initiatives and market outlook.

Steve Laxton (Chief Financial Officer)

Thank you, Leon, and thank you all for joining us this morning. We’re in the final stages of construction at our new sheet mill project in West Virginia and we’re commissioning equipment across the site. I want to thank the team in West Virginia for their hard work and excellent safety performance throughout the multi-year construction phase. They’ve kept the project on time and on budget while reaching several important milestones. In September, the melt shop produced its first heat and in October we started shipping coils from the pickle line to our downstream Nucor divisions.

And by December we expect to run our first coils through the hot mill, cold mill and construction-grade GALV lines. As we complete commissioning, the team is preparing to ramp production in early 2027. Our priority will be to operate safely and reliably while steadily increasing production toward our 50% utilization target by the end of 2027. Our sheet mill network provides an important advantage as production begins. By gradually shifting baseload tons from other Nucor sheet mills to West Virginia, we can provide the new mill a steady base of orders to support a successful ramp through 2027 and ’28.

As with any project of this scale and complexity, we expect startup costs to remain elevated in 2027 at levels similar to or higher than those in 2026. Turning to our Berkeley, South Carolina sheet mill, our new automotive-grade galvanizing line began production early this month. We expect utilization rates for the new GALV line to reach 50% in the second quarter of next year on its way to full run rate by the end of 2027. At full production, this new line will add 500,000 tons of annual galvanizing capacity. Taken together, our investments in West Virginia and South Carolina enhance Nucor’s ability to serve the automotive market, where we are relatively underweighted today.

As both projects ramp and complete customer qualifications, we will build on the strong relationships we already have in place with many of North America’s leading automakers. But we are not simply waiting for these investments to ramp. While North American automotive production is essentially unchanged year-to-date, Nucor’s flat-rolled shipments to automotive customers are up 4%. And as we grow our automotive shipments, we’re expanding what we can offer with the capabilities we have in place today. Recently we commercialized exposed-quality galvanized steel for the exterior panel of an SUV platform. We accomplished this using thin slab casting, demonstrating Nucor’s innovation in EAF steelmaking.

And as new growth projects come online, we’ll have even more opportunities to expand our position in the automotive market. Moving to our Towers and Structures business, we’re encouraged by how each of our facilities is progressing and the strength of our customer demand. Our Decatur, Alabama facility is on track to be EBITDA-positive this month, while our Crawfordsville, Indiana facility began full production in the third quarter and is expected to follow a similar path toward profitability. Our Brigham City, Utah facility remains on track to reach full production by mid-2027.

We are now qualified with more than 30 utilities with additional customer qualifications underway, and we’ve entered into multi-year agreements with several of the largest utilities in the United States. That momentum is reflected in our order backlog, which has more than doubled since the start of the year and extends into early 2028. Based on the strength of customer demand, we recently announced a combined $165 million of investments to increase the capacity of our Indiana and Alabama facilities by about 50%.

As a result, we now expect our long-term annual EBITDA contribution from our Towers and Structures business to reach approximately $200 million, up from the $150 million previously forecast. Turning to our demand outlook, Nucor continues to expect steel mill shipments growth to finish closer to the higher end of our 5% to 10% range for 2026, supported by several durable underlying drivers. Let me touch on a few of these. First, infrastructure: while the IIJA was passed about five years ago, the infrastructure investment activity it was meant to spur is still accelerating. State-level decision making and permitting have in many cases taken years to complete, extending construction activity over a longer period of time.

Today, many projects are underway, but new ones are still being approved, and over $135 billion of funding has yet to be spent as of August. In addition, steel requirements for the border wall are substantial and stadium construction shows no signs of slowing. Second, reshoring and digital infrastructure: the COVID pandemic highlighted the fragility of our domestic supply chain and underscored the need to manufacture more in the U.S. In support of this, federal actions on tax, trade and regulatory fronts have helped stimulate considerably higher levels of manufacturing construction. This is broader than the chip fab activity first encouraged by the CHIPS Act and now includes sectors like pharmaceuticals, automotive, appliance and electrical components, and data center construction activity has gone from a small niche to a significant driver of nonresidential building construction activity.

Finally, energy: rising demand, aging infrastructure and the need to strengthen the grid are driving substantial investment in the power sector. Utilities plan to spend nearly $1.4 trillion over the next five years with steel-intensive investments ranging from generation and substations to transmission upgrades. Beyond power, we’re seeing strong demand across the oil and gas sector including LNG terminals and pipeline construction, and growing domestic production of oil country tubular goods.

We see these trends as durable and we believe Nucor is incredibly well positioned with our world-class manufacturing team and broad portfolio to meet the needs of our customers across these diverse applications. With that, let me turn the call over to Jack. Jack.

Jack Sullivan (Chief Financial Officer)

Thanks, Steve, and good morning, everyone. In the third quarter, Nucor generated net earnings of $1.3 billion, or $5.80 per share. This exceeded the midpoint of our guidance range by roughly 3.5%, primarily due to higher-than-expected shipments and higher average selling prices in our steel mills segment. Let me now review our third quarter performance by segment. The steel mill segment generated $1.8 billion of pre-tax earnings, an increase of $232 million from the prior quarter. As Leon mentioned, we set another quarterly shipment record with volumes up 2%. Average selling prices rose across the segment, led by our sheet and structural groups. These increases were partially offset by higher costs. As a reminder, the second quarter benefited from $130 million in cash refunds that reduced cost of goods sold, and that benefit did not recur in the third quarter.

Turning to steel products, we generated pre-tax earnings of $465 million, an increase of $112 million from the prior quarter. Volumes increased 6% and average selling prices rose 7%. The improvement in pricing was particularly encouraging, as realized pricing in our downstream businesses is catching up with the higher steel input costs that compressed margins earlier this year. As a result, the EBITDA margin for our steel products segment increased approximately 200 basis points from the second quarter.

And in our raw materials segment, we generated pre-tax earnings of $105 million compared to $146 million in the prior quarter, reflecting lower pricing and shipments. Pre-operating and startup costs totaled $124 million compared to $120 million in the prior quarter. Turning to capital allocation and the balance sheet, we generated $1.6 billion of free cash flow in the third quarter, bringing our year-to-date total to nearly $2.7 billion. Cash from operations has grown from $900 million in the first quarter to over $2.2 billion in the third as we benefit from healthy market conditions and growing contributions from our recent investments. At the same time, capital spending is moderating as our major projects near completion.

We’ve deployed just under $1.9 billion in capex year-to-date, with the majority going toward growth projects. For the full year, we expect our capital expenditures to finish at or slightly below our original $2.5 billion estimate. Our free cash flow supports meaningful returns to shareholders. During the quarter, we returned $629 million through dividends and share repurchases, up approximately $150 million from the second quarter. Year-to-date, we’ve returned nearly $1.4 billion, or 42% of net earnings.

We remain committed to returning at least 40% of net earnings to shareholders on an annual basis. All of this is underpinned by our strong balance sheet and investment-grade credit profile. We ended the quarter with approximately $3.6 billion in cash and liquidity of $4.3 billion. Total debt as a percentage of capital was 23%, and our credit ratings remain the highest of any North American steel producer. Looking ahead, we expect our capex to decline further in 2027, extending the step down from peak spending in ’24 and ’25. We’ll share more detail on our 2027 capital allocation plans on our year-end call in January.

Turning to our fourth quarter outlook, we expect consolidated earnings to be in line with or modestly higher than the third quarter results. In steel mills, we expect stable earnings as higher average pricing across all product groups is offset by seasonally lower volumes and higher costs. The cost increase reflects lower fixed cost absorption and higher startup spending at West Virginia as we add teammates and prepare to ramp production. In steel products, higher pricing is expected to offset the impact of lower volumes, resulting in stable earnings for the segment.

In raw materials, we expect slightly lower earnings primarily due to lower realized DRI pricing. Finally, we expect to benefit from lower intersegment profit eliminations that should reduce corporate and elimination expense relative to the third quarter. And as 2026 draws to a close, we’re excited about Nucor’s earnings prospects for 2027. Healthy, durable demand across key end markets, another step up in contributions from new growth projects, and supportive federal policy all position us for another strong year. And with the broadest range of capabilities in the North American steel market, we’re confident the Nucor team will deliver on that opportunity for our customers and shareholders. And with that, we’d like to hear from you and answer any questions you may have.

Operator, please open the line for questions.

OPERATOR

We will now begin the question and answer session. If you would like to ask a question, please press star one to raise your hand. To withdraw your question, please press star one again. We ask that you pick up your handset when asking a question to allow for optimum sound quality. If you are muted locally, please remember to unmute your device. Please stand by while we compile the Q&A roster. Your first question comes from the line of Nick Cash with Goldman Sachs and Company.

Your line is open. Please go ahead.

Nick Cash (Analyst)

Hi, team. Good morning, and thank you for taking my questions. The first question I have is, you’ve been running at record shipment levels this year and suggesting it’ll be closer to the 10% range, driven by strength in demand over the past few years, quarters, as well as backlog visibility. I just wanted to know, as you think into ’27, how much further organic volume growth do you think Nucor’s existing system can generate before considering contribution from West Virginia?

And then which end markets give you the most confidence in another year of growth?

Leon Topalian (Chair and Chief Executive Officer)

Hey, Nick, it’s Leon. I’ll kick us off and I want to begin with something I shared in the opening. You know, Nucor has just come through the safest summer ever. And if we look back at our history, the months of June, July, and August have historically been the most dangerous and the most opportunity for injuries across our entire enterprise. Our team set out a very audacious goal to target no injuries for those three months. And while we didn’t meet that, we ended up with the safest three months in the history of Nucor and now are putting those efforts towards the safest fall.

The thing to really remember in all of that is every one of those numbers that we track has a name. Every name has a family, and every family deserves to be complete. Our greatest responsibility as leaders in this company is to the men and women of this amazing company of ours. And so thank you, team, for what you do and how you take care of our customers and for working safe each and every day. And Nick, as you talk, you know, as we came off the highs of ’21 and ’22, you know, ’23 was an okay year, ’24 and ’25 were very tepid. But look, our investment strategies, our capital allocation philosophy has been to invest for the long term. And so over the last six and a half years, you’ve seen Nucor deploy about $19 billion worth of capital, half in organic growth and the other half in M&A. And so it’s the ultimate strategy of playing to where the puck’s going to be, not where it’s at, understanding our customer, customer demand, understanding the capability sets that are needed by our customers, and building and creating those opportunities to win. And that is exactly what you’re seeing Nucor do today, executing on an incredibly strategic plan to grow the core, expand beyond, and live our culture.

And so we’ve had the best quarter in three years. We’re on the track to have the safest year in all of our entire history. ’26 is shaping up to be the third-best financial year in the history of our company, and we fully expect that ’27 will be even stronger. Well, where’s that coming from? The end market probably that gets more attention in the entire economy is data centers. And while that’s a major part in some of our product groups, it represents about 15% of our entire backlog as an enterprise.

It’s a strong end market, but so are chips and technology and hardware, natural gas, gas power plants, LNG export terminals, nuclear utilities, pharma, heavy equipment is coming back and gangbusters, shipbuilding, military and defense spending, appliance and HVAC. And so I would tell you in my 31 years in Nucor, Nick, we are seeing, I am seeing currently the strongest demand environment across the breadth of Nucor’s products. Couple that with the investments that we’ve made in West Virginia, Brandenburg, Lexington—our micro mill in Lexington—Kingman, Arizona, Crawfordsville’s paint line, Berkeley’s galvanizing line, and Brandenburg’s plate mill are all now firing. Again, as Steve mentioned just a minute ago, West Virginia will fully commission this year and begin its full ramp in 2027. We are at the tip of the spear of the greatest economic growth in our nation, and I couldn’t be more optimistic about what 2027 and beyond is going to bring.

Finally, I would tell you with the last part of all of that: As that capex unwinds of our spend into 2027, it skyrockets the free cash flow on top of the margins that we’re earning, on top of the contributions that the new investments are already having and will continue to ramp into ’27. It means we’re fueled for growth, disciplined growth, just like we have over the last six years. That money is not burning a hole in our pocket, and if we don’t have a great use for it, you’re going to get it back.

Over the last 16 years, we’ve returned nearly $15 billion to our shareholders through dividends or share buybacks, and we will continue to focus on that. However, I can tell you there are massive areas of growth for our company that we’re targeting now, mostly in the expand-beyond categories, but we are just getting warmed up. I couldn’t be more optimistic about 2027 and beyond and the future of Nucor.

Nick Cash (Analyst)

That is all really fantastic color. I really appreciate it. And then just one quick follow-up. I mean, you mentioned just on the cost side, you know, costs were a little bit higher than expected. I think mills margins were a little bit lighter than expected. Acknowledging the $130 million tailwind from last quarter, could you provide any further color on any inflationary pressures you might be experiencing? I know you mentioned some lower fixed cost absorption, but any other impacts experienced in the quarter?

And then for the 4Q guide of flat earnings, can you provide any additional color on how these impacts or how these costs could impact margin trajectory in the year end?

Jack Sullivan (Chief Financial Officer)

Yeah, Nick, good morning, it’s Jack. You’re right, conversion costs did tick up some in Q3, but I think we need to put a few things into perspective here. Nucor’s EBITDA margin expanded to over 20%, and that’s our highest level in the past three years. So we continue to see margin expansion even with some of that conversion cost per ton creep. In terms of specifics and where we saw that, I’d point you to certain consumables, freight, certainly energy, and just some other services. But keep in mind when you’re running at high utilization rates, particularly in hot demand environments like we’re seeing right now, you do tend to see some costs creep up just to keep operations running. Maybe that’s overtime pay or some higher energy costs when, in softer markets, we may have chosen to curtail in higher-energy-cost environments.

And you pointed out correctly, we also didn’t benefit from the tariff refunds that occurred in Q2. The other thing unique to Q3 when you’re comparing it to Q2: we did have more planned outages in the quarter, and of course that led to some lower fixed cost absorption. So I’d say your last question about looking ahead to Q4, I think you could expect a modest uptick in conversion costs quarter over quarter. And again, we do have some outages in Q4. We’ve got, you know, we pointed to some gradual increase in pre-operating startup costs as we get West Virginia closer to ramp up. And yeah, those would be the things to point to.

Nick Cash (Analyst)

Thank you so much. I’ll pass it on.

Chris Jacoby (Director of Investor Relations)

Thanks, Nick.

OPERATOR

Your next question comes from the line of Bill Peterson with JP Morgan. Your line is open. Please go ahead.

Bill Peterson (Analyst)

Hey, good morning, team. Congrats on the quarter and thanks for taking my question. I would like to unpack the shipment guide in 4Q. You’re still kind of being towards the high end of the range, which would be like 10% year-on-year growth. But I guess if you ran it through, it would imply around down 10% quarter on quarter, which would be more like 2020–2021–2022 as compared to the last few years, which were below that. In terms of seasonality, I believe you have two fewer shipping days.

Are you taking into account other things like holidays? And maybe you can characterize how much downtime you’re expecting? Just trying to get a sense—can there be upside to this number?

Jack Sullivan (Chief Financial Officer)

Yeah, hey Bill, it’s Jack. All good questions. You’re right. We do have two fewer fiscal Q4 compared to Q3, 89 versus 91. But also, to your point, there are four additional non-shipping days really just due to Q4 holidays—when you think of Veterans Day, Thanksgiving, a few days around Christmas Eve and New Year’s. So, in aggregate, you’re talking five or six fewer days of shipping compared to the prior quarter, plus the added risk of some winter weather in certain regions.

Q4 planned outages I just mentioned—some of those outages are at our largest mills—and so planned downtime relative to Q3 actually has a few more days. So keep that in mind. But I think it’s also important to recognize we’re coming into Q4 off of a record-high Q3 shipment quarter. So I think sometimes it’s easier to ship through outage season during softer markets; a little bit harder to do so when the mills are already operating at such a high level. There’s just less slack in the system. But, you know, I think if you looked historically, quarterly shipments Q3 to Q4 have trended down about 7%. And so that may be a useful planning assumption as you’re looking to fine tune your models.

I think the silver lining here though, Bill, is we’ve guided you to steel mills earnings having relatively flat quarter over quarter. And really that’s just for all the obvious reasons—we’re going to see some volume softness due to seasonality and the outages, but a stronger pricing outlook sort of neutralizes that impact. But rest assured, our goal is to ship every ton possible.

Bill Peterson (Analyst)

That’s terrific color, thanks for that. Earlier, I think you said that your data center was something around 15%. I’m not sure if that’s a mill statement or a product statement. But I’m trying to get a sense for how big that opportunity is for you as we think about 2026. And do you expect that to grow? And then the second one you called out was the border wall, and you characterized it tons per mile. I was trying to figure out how much border wall needs to get built, and I’d like to get a sense on how you see the border wall opportunity this year and also for next year. Would you expect that to grow again?

Leon Topalian (Chair and Chief Executive Officer)

Yeah, Bill, I’ll touch on—remember now, I got the second part of your question. The first part was on data centers. Right. Look, if we step back, you know, most of the forecasts and analysts are talking massive numbers, you know, multi-trillion dollars worth of spend over the next five, six, seven years. And so Nucor’s entrance into this isn’t like weeks or months old. This is something going back two or three years that we have been, again, readying ourselves to be where the puck’s going to be at.

And so today, with the acquisitions of Southwest Data Products, our Nucor Warehouse Systems, our capability set in our buildings, plate, structural tube, all are now combining where today Nucor can make or supply roughly 95% of all the steel required inside of and outside of a data center today. So we are really, really capable of providing most of what the hyperscalers need today. Our relationship build with them over the last four, five, six years has been incredible.

There’s a high level of trust there. We earn a lot of that business. And so to your question, do we anticipate that growing into 2027? Yes. And again, as you know, we think about growth and fueling Nucor’s expand-beyond growth, you can expect that some of those areas of growth will be in that space, and the continued buildout of our data center offering to our customers. As we get to the border wall, I’ll ask John Hollatz maybe to comment on that. It’s been a lightning rod for us and, again, another end market that we’ve been really very well prepared and capable to supply that need. But John, maybe give some framing around the volumes.

Tyson

Hey, Bill. On the border wall, we estimate there’s about 1,400 miles of new wall to be built. That’s primary and secondary wall, and there’s around 1,500 tons of steel in there per mile. And we have been shipping thousands of tons every week to the border. You can see it in the increased volumes in our tubular group. And that’s going to continue all the way through 2027 and well into 2028. And again, we’re the only company with the raw materials, the sheet supply, the tube capacity, and the logistics team to keep up with the demand for the border and for the tube group.

It’s not just border. On top of that, you’ve got a really strong demand for structural. On the HSS side, we’re seeing incredible performance from our conduit team. Our sprinkler pipe team is having a great year, and all of that has played a role in leading to our steel products group having the best quarter on the earnings side that we’ve had since the beginning of 2024. So we see a really good outlook well past the end of ’26 and into ’27 for the border fence.

Bill Peterson (Analyst)

Appreciate the color, Tyson. Congrats again.

Tyson

Thank you, Bill.

OPERATOR

Your next question comes from the line of Lawson Winder with BofA Securities. Your line is open. Please go ahead.

Lawson Winder (Analyst)

Thank you, operator. Good morning, Steve and Jack. Nice result. Thank you. For today’s update, if I could ask on your comments around merchant bar, could you just discuss a bit more as to what end markets are primarily driving that? And then, you know, how do the market dynamics vary regionally on merchant bar? And then is there any merchant bar replacement of rebar capacity at the current moment or to any extent at all?

Steve Laxton (Chief Financial Officer)

Say that last part of your question again, Lawson.

Lawson Winder (Analyst)

Just in terms of the strength in shipments from merchant bar, is that causing any displacement of rebar shipping capacity?

Leon Topalian (Chair and Chief Executive Officer)

Okay, look, I’m going to ask Randy Spicer to jump in on this. But just, you know, a bit of framing, you know, our rebar strategy and that end market has been incredibly strong for us. Our long product groups are some of the most profitable and have been through the entire cycle. You know, there’s a lot of questions, right, of the flattening of this cost curve, but our ability to maintain margins, our ability and how our teams executed and remaining that low-cost producer, building these facilities where there’s a high level of scrap inventory as well as the customers that are in proximity gives Nucor a unique, differentiated advantage in this marketplace. And quite frankly, ADC is growing. And so I remain very optimistic knowing that, and there’s some competitors coming into the space and that will continue.

But we’ve been in this business for 60 years now. We know this market incredibly well. Our teams are executing at a high level. But, Randy, why don’t you share a little more on what we’re doing with merchant bar in particular and that growth?

Randy Spicer (Executive Vice President)

Yeah, thanks, Leon. Lawson, thank you for the question. Yeah, certainly seeing tremendous growth in both, quite frankly, merchant and rebar, as evidenced by the record shipments that we’ve seen that’s in place. What I would tell you specifically around merchant bar is it’s got exposure to some of the highest markets that we’ve seen right now. Specifically, as Leon had just talked about, data centers. We’re in the middle of what we call the AI Super Bowl. The hyperscalers have committed enormous amount of capital to these data center buildouts. And those structures require these larger sections that we’re able to produce at Nucor, and that’s showing up directly in our order book. As you can look and see, we’re at record levels to be able to take advantage of both here in ’26 as well as the growth as we go forward into ’27.

With that, you’re also spot on of as you see the margins increase in that space, you’re also seeing some of the rebar producers out there, right, that are capable of making flexible products, of which Nucor is one of the largest in that space, that you’re actually able to move into the merchant bar space as well. So with that growth, we’ve continued to see strong performance, and we would expect to see that as we go forward into future years.

Lawson Winder (Analyst)

Okay, that’s very helpful. And then maybe just to put a finer point on my last question, I mean, given the way your capacity is kind of set up between Missouri, is there some displacement of rebar as a result of that merchant bar capacity? That is, is the rebar market in the U.S. getting tighter as a result of what you’re seeing in merchant bar?

Leon Topalian (Chair and Chief Executive Officer)

Well, look, you’re seeing ADC actually grow. You know, if you look back a year or two, is it roughly nine, nine and a half million tons? We’re predicting that to be upwards of ten and a half or possibly eleven. And so the market is growing. And so, you know, that just bodes very well again for our capability set and where we’re going. But, you know, very specifically to your displacement question, you know, one of the unique advantages and what Randy and his groups have done, again this is over years, is when we put Frostproof and Sedalia in, our first two micro mills, we looked at the overall mix and how do we supply that.

We took Darlington from rebar, some MBQ, into no more rebar and all MBQ and higher-end SBQ and wire rod. And so Darlington’s capabilities has expanded tremendously, and Kankakee’s investment in their growth, and they’ve moved out of a lot of rebar into heavy MBQ and beyond. And so again, the breadth of our footprint enables us to shift and modify where we meet the geographic needs and the capability sets that, again, our customers need from us in the regions where we’re located.

So yeah, there’s been a lot of that that’s happened, Lawson, over the last five, six, seven years that really kind of catapulted with the investment of the rod mill at Darlington and now continues on.

Lawson Winder (Analyst)

Fantastic as always. I appreciate the color very much.

Leon Topalian (Chair and Chief Executive Officer)

Thank you, Lawson.

OPERATOR

Your next question comes from the line of Tristan Gresser with BNP Paribas. Your line is open. Please go ahead.

Tristan Gresser (Analyst)

Yes, hi, good morning. Thank you for taking my questions. I have two. First one is on your auto strategy. You had a slide in your presentation and I think a couple years ago you mentioned your goal to double auto shipments. So could you provide maybe an update tonnage-wise, how much you expect to achieve this year and the next? Also, I was curious if you, I don’t think you’ve done this in the past, but are you entering into annual contracts with OEMs?

Do you have everything you need from a raw material standpoint or you need to make some adjustments? And lastly, from a quality perspective, it would be interesting to have your view if you’re confident that you can, you know, fully replicate the products that, you know, customers usually get from integrated producers. I leave it there.

Leon Topalian (Chair and Chief Executive Officer)

Tristan, I’m going to go ahead and jump in here, and while I’m going to tell you Noah Hanners will answer the question in a minute, I may not leave him anything to answer because I really appreciate the question and I want to fully blow apart any notion that EAFs do not have the technical and quality capabilities to provide and make exposed automotive panels. It has been the last bastion of the integrated competition and the only thing they have left.

Think about it: left in America, there’s not a single integrated producer making a long product in America. All EAFs do all of that today. So the last piece of that pie has been the exposed automotive panels. And I’m really pleased to report on behalf of Noah and the entire sheet group that Nucor has been awarded an entire platform with General Motors for exposed automotive sheet. And you’re going to couple that work, that time, that effort, those resources, the process engineering and process and quality control, the PPAPs — all that work is now shifting into West Virginia. So as they begin ramping up, that mill will produce 30% automotive steels capable of making the highest end.

So you can fully dismantle any notion that the EAF producers cannot make the most complex, high quality, and exposed pieces of that vehicle. It’s over. We’re on it. We’re doing it. And we’re going to continue to do — and we’re going to continue to take that market share away from the integrated producers, period. Full stop. So, Noah, anything to add on that? I’ll leave… Bob.

Noah Hanners

I love Leon’s energy around this because he’s so proud of what our team is accomplishing, and we can produce the full suite, what auto demands from us. And I’ll tell you, our customers are pumped about doing more business with us. And the capabilities that we’re bringing to the market are perfectly timed for meeting their demands. I mean, you talk about West Virginia — the first phase of West Virginia is largely volume-improving the mill. And then we get out into 2028, and that’s when we’ll start to put auto tons through qualifications on West Virginia.

So it’s coming soon. The second thing is at Berkeley. We already do a lot of auto out of Berkeley. They were the substrate mill for that qualification Leon just mentioned. They just galvanized their first coil on the new Galvan last week. Awesome accomplishments from that team — on time, on budget, and we’re just really well positioned to take substantial share in the automotive market, continue to grow, exercise our capabilities there. We’re at about 10% this year.

We’ll do about a million tons at West Virginia as we’re ramped up there. Significant portion of that, probably 10%, goes into auto exposed. So, awesome, awesome story about our growth in automotive. Really proud of our team.

OPERATOR

Your next question comes from the line of Matt Dushkin with Wells Fargo. Your line is open, please go. Your next question comes from the line of Richard Garciatorena with Barclays. Your line is open. Please go ahead. All right, team, it looks like we’re having a bit of technical difficulty with these last two questions here. It appears our conference room has dropped. So in order to get these last two questions up, we will need to end this event and restart this broadcast.

Leon Topalian (Chair and Chief Executive Officer)

Caleb, why don’t we wrap here, and then Jack and his IR team can reach out accordingly to Richard and the other gentleman to answer their question.

Caleb

Okay. Yeah, the only thing — we won’t have the closing remarks on the broadcast. We’ll have to add those in separately.

Leon Topalian (Chair and Chief Executive Officer)

I do that live right now anyway, so we’re ready to wrap up, Caleb.

Caleb

Okay. Unfortunately, because the conference room has dropped, they’re not able to hear your closing remarks.

Leon Topalian (Chair and Chief Executive Officer)

How quickly can we restart it?

Caleb

We can do it pretty quick here. I will end the broadcast and the event. You’ll just have to call back in, and you’ll have to ask your analysts to redial back. Okay, great.

OPERATOR

Thank you. Sorry about those technical difficulties. Just a reminder, if you would like to ask a question, please press star one to raise your hand. To withdraw your question, press star one again. Your next question comes from the line of Matt Dushkin with Wells Fargo. Your line is open. Please go ahead.

Matt Dushkin (Analyst)

Yeah, hey guys, I thought it was on my end, so I guess it wasn’t, but we’re back here. So on the data centers that y’all said, it’s 15% of backlog. I just kind of want to unpack: what’s the breakout of that between your different products, you know, like how much is structural versus how much is sheet versus downstream? Just any color there would be helpful.

Leon Topalian (Chair and Chief Executive Officer)

Yeah, look, the 15% is the entire enterprise, you know, and obviously in the long products, particularly structural, much higher, Matt. It’s in the 30, 35% range. And so, you know, those teams continue to operate in one of the strongest demand environments. Well, the strongest demand environment we’ve ever had. Nucor, Yamato and Berkeley beam are running rates with backlog that are unprecedented; we’ve never seen in the history of those mills, in the 35-year history at NYS.

So again, robust doesn’t really do justice to the demand drivers fueling that. And a big piece of that for structural is the data centers.

Noah Hanners

Matt, maybe if I could just add a little bit there too. Some of our downstream businesses are seeing a lot of volume from the.

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