Q3 2023 Nucor Corp Earnings Call

Speaker 1: We've 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.

Jack Sullivan: We've 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.

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.

Speaker 1: Today's discussion will include the use of non- GAAP financial measures and forward-looking information within the meeting of securities law.

Speaker: Today's discussion will include the use of non-gap financial measures and forward-looking information within the meaning of securities laws.

Today's discussion will include the use of non-GAAP financial measures and forward looking information within the meaning of securities laws.

Speaker 1: Actual results may be different and involve risks outlined in our Safe Harbor Statement and disclosed in NUCOR's SEC filing.

Speaker: Actual results may be different 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-gap financial measures.

Actual results may be different and involve risks outlined in our safe Harbor statement and disclosed in Nucor's SEC filings.

Speaker 1: 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.

The appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures.

Speaker: So with that, let's turn the call over to Leon.

So with that let's turn the call over to Leon.

Leon Topalian: Thanks, Jack, and welcome everyone. I'd like to begin today's call by highlighting the tremendous performance of our 32,000 Nucor team members through the first nine months of the year. The investments we're making to grow our core and expand into new markets or generating strong returns for our shareholders and our team continues to operate efficiently and safely.

Thanks, Jack and welcome everyone.

Speaker 2: I'd like to begin today's call by highlighting the tremendous performance of our 32,000 new core team members through the first nine months of the year. The investments we're making to grow our core and expand into new markets are generating strong returns for our shareholders. And our team continues to operate efficiently and safely. In fact, we're on pace to deliver our fifth consecutive year of record safety performance.

I'd like to begin today's call by highlighting the tremendous performance of our 32000 Nucor team members through the first nine months of the year.

The investments, we're making to grow our core and expand into new markets are generating strong returns for our shareholders and our team continues to operate efficiently and safely in fact, we're on pace to deliver our fifth consecutive year of record safety performance.

Leon Topalian: In fact, we're on pace to deliver our fifth consecutive year of record safety performance, further proof of the world-class performance by our Nucor team members who live our culture each and every day. Looking at our financial performance in the second quarter, Nucor generated approximately $1.8 billion of EBITDA and $1.1 billion net earnings, or $4.57 per diluted share. This brings our year-to-date net earnings to $3.7 billion or $14.83 per diluted share. Even though we still have one more quarter to go, our year-to-date earnings through September already represents our third best full year in Nucor's history.

Speaker 2: further proof of the world-class performance by our new core team members who live our culture each and every day.

Further proof of the World class performance by our Nucor team members, who live our culture, each and every day.

Looking at our financial performance in the second quarter nuclear generated approximately $1 8 billion of EBITDA and $1 1 billion net earnings or $4 57 per diluted share.

Speaker 2: Looking at our financial performance in the second quarter, NewCore generated approximately $1.8 billion of EBITDA and 1.1 billion net earnings, or $4.57 per diluted share. This brings our year-to-date net earnings to $3.7 billion or $14.83 per diluted share.

This brings our year to date net earnings to $3 7 billion or $14 83 per diluted share.

Speaker 2: Even though we still have one more quarter to go, our year-to-date earnings through September already represents our third best full year in New Corps history. In keeping with our investor-focused capital allocation strategy, we've returned $627 million to shareholders in Q3, representing 55% of our net earnings for the quarter.

Even though we still have one more quarter to go our year to date earnings through September already represents our third best full year in Nucor's history.

Leon Topalian: In keeping with our investor-focused capital allocation strategy, we've returned $627 million to shareholders in Q3, representing 55% of our net earnings for the quarter. On the operation front, total shipments to outside customers was approximately 6.2 million, down 5% compared to the prior quarter, and down 3% compared to Q3 of 2022. Total steel mill shipments for the quarter were nearly 5.8 million tons, and downstream steel product shipments to outside customers was roughly 1.1 million tons.

And keeping with our Investor focused capital allocation strategy, we've returned $627 million to shareholders in Q3, representing 55% of our net earnings for the quarter.

Speaker 2: On the operations front, total shipments to outside customers was approximately $6.2 million, down 5% compared to the prior quarter and down 3% compared to Q3 of 2022.

On the operation front total shipments to outside customers was approximately $6 2 million down 5% compared to the prior quarter and down 3% compared to Q3 of 2022.

Total steel mill shipments for the quarter were nearly $5 8 million tonnes and downstream steel products shipments to outside customers was roughly $1 1 million tonnes.

Leon Topalian: Earlier this month, we launched a national sustainability campaign branded Made For Good, which highlights our commitment to producing the world's most sustainable steel and our efforts to lead others in our industry to adopt practices that reduce emissions. Our circular recycling-based process gives us a competitive advantage as more customers look to reduce emissions in their supply chain. But we were taking steps to differentiate ourselves even further. We were not just talking about sustainability, we were making investments, informing partnerships to accelerate a cleaner future for Nucor, the broader steel industry, and all industrial manufacturers. And in almost every month of the past year, we've done something to move the needle in that regard.

Earlier this month, we launched a national sustainability campaign branded made for good.

Which highlights our commitment to producing the world's most sustainable steel and our efforts to lead others in our industry to adopt practices that reduce emissions.

Our circular recycling based process gives us a competitive advantage as more customers look to reduce emissions in their supply chain.

But we are taking steps to differentiate ourselves even further we're not just talking about sustainability, we are making investments in forming partnerships to accelerate a cleaner future for nucor, the broader steel industry and all industrial manufacturers.

And in almost every month of the past year, we've done something to move the needle in that regard.

Leon Topalian: Joseph. We've entered into another renewable energy PPA, invested in technologies to develop advanced forms of nuclear power generation and zero carbon iron making, formed a partnership to capture, transport, and sequester CO2 emissions from our Louisiana DRI facility, introduced El Cion, our new sustainable heavy gauge steel plate for the offshore wind energy industry, and help lead the Global Steel Climate Council, a coalition of global steel companies in industry partners to develop a clear and unbiased global standard to measure and report carbon emissions. Consistent reinvestment in our businesses has played a critical role in our company's growth.

We've entered into another renewable energy PPA invested in technologies to develop advanced forms of nuclear power generation and zero carbon iron making.

Formed a partnership to capture transport and sequester Cotwo <unk> from our Louisiana <unk> facility.

Introduced <unk>, our new sustainable heavy gauge steel plate for the offshore wind energy industry.

And help lead the global steel climate Council, a coalition of global steel companies in industry partners to develop a clear and unbiased global standard to measure and report carbon emissions.

Consistent reinvestment in our businesses has played a critical role in our company's growth we make investments after we identify strategies that have compelling risk adjusted return opportunities for Nucor shareholders.

Leon Topalian: We make investments after we identify strategies that have compelling, risk-adjusted return opportunities for new core shareholders. I'd like to highlight three important milestones we've hit recently across sheet, plate, and bar, with a reminder of the strategic rationale behind each investment.

I would like to highlight three important milestones we've hit recently across sheet plate and bar with a reminder of the strategic rationale behind each investment.

Leon Topalian: Starting with sheet, last week we were joined by hundreds of leaders in West Virginia and Mason County for a groundbreaking event to celebrate the start of a construction of our newest sheet mill. This investment in West Virginia, along with additional galvanizing, paint and tube lines we are adding at other sheet mills, will enable new core to produce higher margin value added products for a broader set of customers, especially those who value high quality steel with a lower carbon footprint. By 2026, we will have more than doubled our capacity to produce higher value sheet products compared to our capabilities in 2020.

Starting with sheet last week, we were joined by hundreds of leaders in West Virginia in Mason County for a groundbreaking event to celebrate the start of the construction of our newest sheet mill.

This investment in West, Virginia, along with additional galvanizing paint and tube lines. We are adding at other sheet mills will enable nucor to produce higher margin value added products for a broader set of customers, especially those who value high quality steel with a lower carbon footprint.

By 2026, we will have more than doubled our capacity to produce higher valued sheet products compared to our capabilities in 2020.

Leon Topalian: Turning to plate, earlier this month, we celebrated the official grand opening of our state-of-the-art mill in Brandon Burke and Tucky. This investment positions new core as the most capable plate supplier in the largest plate-consuming region of North America, able to produce specialty plate products that support our nation's economy and security in critical areas such as wind, long span bridges, military applications, power transmission amongst many others.

Turning to plate earlier this month, we celebrated the official Grand opening of our state of the art mill in Brandenburg, Kentucky.

This investment positions Nucor as the most capable plate supplier in the largest plate consuming region of North America able to produce specialty plate products that support our nation's economy and security in critical areas such as wind.

Long span bridges military applications power transmission amongst many others.

Leon Topalian: In August, we held a groundbreaking ceremony for our rebar micro mill in Lexington, North Carolina. This mill will help us to capitalize on growing demand for rebar in the growing mid-Atlantic and southeast regions over the coming decades. The modernized equipment and processes at this new mill will enable us to achieve both improved margins and lower missions intensity for our rebar operations. The team in Lexington is making great progress on the construction and we look forward to starting the mill up in early 2025.

And in August we held a groundbreaking ceremony for our rebar micro mill in Lexington, North Carolina. This mill will help us to capitalize on growing demand for rebar in the growing mid Atlantic and southeast regions over the coming decades, the modernized equipment and processes at this new mill will enable us to achieve.

Both improved margins and lower emissions intensity from our rebar operations.

The team in Lexington is making great progress on the construction and we look forward to starting the mill up in early 2025.

Leon Topalian: As we have said many times, the goal of our growth strategy is to expand our capabilities to better serve our customers and grow our earnings for our shareholders. The new capabilities we're adding in our steel mill and steel product segments are diversifying our customer base and creating more opportunities to cross-sell various products.

As we have said many times the goal of our growth strategy is to expand our capabilities to better serve our customers and grow our earnings for our shareholders.

The new capabilities, we are adding in our steel mill and steel products segments are diversifying our customer base and creating more opportunities to cross sell various products.

Leon Topalian: A lot has already been said about the magnitude of the three steel intensive mega-trends, each fuel by supportive federal legislation. We like to think of these three as the rebuilding, repowering, and reshoring of the U.S, economy and with New Corps's unrivaled scale and diversity, we are favorably positioned to capitalize on these growth drivers.

A lot has already been said about the magnitude of the three steel intensive megatrends each fuel by supportive federal legislation, we like to think of these three as the rebuilding repowering and re shoring of the U S economy.

And with Nucor's unrivalled scale and diversity, we are favorably positioned to capitalize on these growth drivers.

Leon Topalian: Investors have been asking where we are on the cycle of these megatrends and what steel products Nucor's best position to supply. I'd like to share a few thoughts on that, and since it's baseball play all season, I'll use a few baseball metaphors to help make my point. Based on current production and order books, it feels like we're still in the early innings across all three. To be clear, innings played is not intended to reflect on shift, and some eminnings may last longer than in others.

Investors have been asking where we are in the cycle of these mega trends and what steel products Nucor is best positioned to supply.

To share a few thoughts on that incentive baseball playoff season, I'll use a few baseball metaphors to help make my point.

Based on current production and order books it feels like we're still in the early innings across all three to be clear innings play does not intended to reflect tons shipped and some earnings may last longer than others.

Leon Topalian: It's meant to indicate where we believe we are along the continuum from federal and state level appropriations, project engineering and development, the permitting and bidding process, and ultimately taking orders and manufacturing steel products. While all three are still early in the process with still plenty of upside to come, we feel like the IIAJA has progressed the least with respect to steel related orders. The chip sacks has probably had the biggest impact on our order book this far, and the IIA falls somewhere in between.

It's meant to indicate where we believe we are along the continuum from federal and state level Appropriations project engineering and development, the permitting and bidding process and ultimately taking orders and manufacturing steel products.

While all three are still early in the process with still plenty of upside to come we feel like TIAA JA has progressed, the least with respect to steel related orders.

<unk> has probably had the biggest impact on our order book this far.

And the IRA falls somewhere in between.

Leon Topalian: As it relates to the rebuilding effort, with funding through IIA, we have shift tons related to the first wave of bridge projects involving Nucor plate, beam, and piling products. But we believe a lot more has yet to make it out of state-level permitting and the bidding processes, especially with respect to highway construction and power transmission, which will require a great deal of rebar, plate, and heavy sheet. Back to my baseball analogy, the game has started, and we've probably neared the bottom of the first, but some fans are still tailgating while others are just entering the stadium.

As it relates to the rebuilding effort with funding through Iga, we have shipped tons related to the first wave of bridge projects involving nucor plate beam and piling products.

But we believe a lot more has yet to make it out of state level permitting and the bidding processes, especially with respect to highway construction and power transmission, which will require a great deal of rebar plate and heavy sheet.

Back to my baseball analogy. The game has started and we've probably near the bottom of the first but some fans are still tailgating, while others are just entering the stadium.

Leon Topalian: On the repowering front, the financial stimulus under the IRA occurs through tax credits as opposed to the longer allocation process under the IIAJA. This probably gives the IRA a slight edge on timing, but renewable and energy storage projects still take a while to secure financing and all the necessary permits. So, while we are starting to see more orders relating to ground-mounted solar and onshore wind, there's still a lot of upside remaining in the years yet to come.

On the Repowering front, the financial stimulus under the IRA occurs through tax credits as opposed to the longer allocation process under the <unk>.

This probably gives the IRA a slight edge on timing, but renewable and energy storage projects still take a while to secure financing and all the necessary permits.

While we are starting to see more orders relating to ground mounted solar and onshore wind there is still a lot of upside remaining in the year is yet to come.

And finally, the re shoring effort supported by the chips and Science Act as promulgated announcements for at least 37 projects worth an estimated $370 billion.

Leon Topalian: And finally, the reshoring effort supported by the Chips and Science Act has promulgated announcements for at least 37 projects worth an estimated $370 billion. New Corps is already delivering steel products to a few of these, but these projects can take several years to complete and will shift from one steel product to another as construction progresses. When it comes to an advanced manufacturing facility, including semiconductor, battery, and EV plants, New Corps can produce an estimated 90% of the required steel.

Nucor is already delivering steel products to a few of these but these projects can take several years to complete and will shift from one steel product to another as construction progresses.

When it comes to an advanced manufacturing facility, including semiconductor battery and EV plants Nucor can produce an estimated 90% of the required steel.

Leon Topalian: Some of the higher steel intensity products represent home runs for New Corps, but there are plenty of companion tons representing base hits. And in many cases, the profit margins of base hits orders can be quite compelling. Needless to say, we're excited for what these mega trends can mean for the U.S, economy and New Corps plans to be the leading supplier of the steel with which it's built.

Some of the higher steel intensity products represent home runs for Nucor, but there are plenty of companion tons representing base hits.

And in many cases, the profit margins of base hits orders can be quite compelling needs.

Needless to say, we're excited for what these mega trends can mean for the U S economy, and Nucor plans to be the leading supplier of this deal with which it's built.

Steve Blastin: With that, I'd like to turn it over now to Steve Blastin, who will provide additional details about our Q3 performance and outlook for Q4.

With that I'd like to turn it over now to Steve <unk>, who will provide additional details about our Q3 performance and outlook for Q4, Steve. Thank you Leon and thank you all for joining our call. This morning.

Steve Blastin: Steve? Thank you, Leon, and thank you all for joining our call this morning.

Steve Blastin: William. With third quarter consolidated net earnings of more than 1.1 billion, we exceeded the midpoint of our guidance by about 10%. The main driver of this exceedance was better performance in September than we expected from many of our businesses, the most notably in our bar mills and several downstream steel product divisions.

With third quarter consolidated net earnings of more than $1 1 billion, we exceeded the midpoint of our guidance by about 10%. The main driver of this exceedance was better performance in September than we expected from many of our businesses, but most notably in our bar mills in several downstream steel products divisions.

Steve Blastin: The strength of Nucor's business model and growing earnings power were on display yet again. The third quarter with our tenth consecutive quarter, were both net earnings exceeded 1 billion dollars, and return on equity exceeded 25% on a trailing 12 month basis. With respect to our operating segment results, our steel mill screw generated $883 million of pre-tax earnings in the third quarter, a decrease of 37% from the second quarter. While volumes declined roughly 4% from the prior quarter, lower realized pricing accounted for most of the earnings decline.

The strength of Nucor's business model and growing the earnings power lawn display yet again, the third quarter was our 10th consecutive quarter, where both net earnings exceeded $1 billion and return on equity exceeded 25% on a trailing 12 month basis.

With respect to our operating segment results, our steel Mills' group generated $883 million of pre tax earnings in the third quarter, a decrease of 37% from the second quarter.

While volumes declined roughly 4% from the prior quarter lower realized pricing accounted for most of the earnings decline.

Steve Blastin: As an example, our realized sheet pricing for the third quarter fell by roughly $80 a ton compared to the prior quarter, outpacing more modest declines in our cost of scrap and ore-based metallics. Our utilization rate for the quarter was 77% down from 84% in the prior quarter. This lower utilization rate with a key factor affecting higher price per ton conversion cost at our steel mills.

As an example, our realized pricing for the third quarter fell by roughly $80 a ton compared to the prior quarter outpacing more modest declines in our cost of scrap and ore based metallics, our utilization rate for the quarter was 77% down from 84% in the prior quarter.

This lower utilization rate was a key factor affecting higher price per ton conversion costs at our steel mills.

Steve Blastin: We continue to see excellent results from a steel product segment. Pre-tax earnings for steel products were approximately $807 million for the third quarter. As you know, our steel products business produces the most diverse set of solutions in our industry, and we're benefiting from this broad range of capabilities. During the quarter, we saw stronger contributions from areas like rebar fabrication, pre-engineered metal buildings, and insulated metal panels. These partially offset some declines in joist and deck intubular products.

We continued to see excellent results from our steel products segment.

Pre tax earnings for steel products were approximately $807 million for the third quarter as you know our steel products business produces the most diverse set of solutions in our industry and we're benefiting from this broad range of capabilities.

During the quarter, we saw stronger contributions from areas like rebar fabrication pre engineered metal buildings and insulated metal panels.

These partially offset some declines in joist and deck and tubular products.

Steve Blastin: While joist and deck profitability continues to moderate from historically high levels, it remains well above pre-pandemic averages. Although there is a lingering lack of clarity with the overall economy, we're still seeing areas of growth within non-residential construction. Here again, new course diverse product range is allowing us to see gains with advanced manufacturing facilities and data centers on the buildings front and transportation and energy on the infrastructure front.

While our joist and deck profitability continues to moderate from historically high levels. It remains well above pre pandemic averages.

Although there is a lingering lack of clarity with the overall economy, we're still seeing areas of growth within nonresidential construction here again nucor's diverse product range is allowing us to see gains with advanced manufacturing facilities and data centers on the buildings front and transportation and energy on the infrastructure front.

Steve Blastin: Our raw material segment produced pre-tax earnings is $71 million for the quarter. Compared with the prior quarter, we shipped lower volumes and saw lower realized pricing in both our DRI and recycling businesses.

Raw materials segment produced pretax earnings of $71 million for the quarter compared with the prior quarter, we shipped lower volumes and saw lower realized pricing in both our DIY and recycling businesses.

Nucor generated nearly $2 $5 billion of cash from operations during the third quarter and $5 6 billion through the first nine months of the year.

Steve Blastin: New court generated nearly $2.5 billion of cash from operations during the third quarter and $5.6 billion through the first nine months of the year. This strong cash flow enabled our balanced approach to capital allocation. Our framework for capital remains the same. We expect to maintain a strong investment-grade balance sheet, make meaningful direct returns to shareholders, and create long-term value by redeploying capital and advancing our strategy. New course balance sheet remains strong with a total debt to capital of just around 24% and more than $6.7 billion of cash on hand at the end of the last quarter. This level of liquidity provides support as we move into a period of accelerated capital spending over the next year with large capital projects such as our West Virginia sheet mill, while also enabling potential M&A activities.

This strong cash flow enabled our balanced approach to capital allocation.

Our framework for capital remains the same we expect to maintain a strong investment grade balance sheet make meaningful direct returns to shareholders and create long term value by redeploying capital and advancing our strategy.

Nucor's balance sheet remains strong with a total debt to capital of just around 24% and more than $6 $7 billion of cash on hand at the end of last quarter.

This level of liquidity provides support as we move into a period of accelerated capital spending over the next year with large capital projects, such as our West Virginia sheet mill, while also enabling potential M&A activity.

Nucor has a long track record of returning capital to shareholders. Since 2020, Nucor has returned approximately $9 $3 billion back to shareholders through dividends and share repurchases.

Steve Blastin: University. Nucor has a long track record of returning capital to shareholders. Since 2020, Nucor has returned approximately $9.3 billion back to shareholders through dividends and share repurchases. Year to date, Nucor has returned nearly $1.8 billion or 47% of net earnings to shareholders.

Year to date Nucor has returned nearly $1 $8 billion or 47% of net earnings to shareholders.

Steve Blastin: Turning to capital spending, as you may recall, initial progress on several of our growth projects was slower than anticipated. But in particular, our largest project in West Virginia was delayed. Because of the slower spending and timing delays, we're reducing our 2023 capital spending estimates from $3 billion to approximately $2.4 billion with the difference between those figures being pushed into 2024.

Turning to capital spending as you may recall initial progress on several of our growth projects was slower than anticipated, but in particular, our largest project in west Virginia was delayed.

Because of the slower spending and timing delays.

We're reducing our 2023 capital spending estimates from $3 billion to approximately $2 4 billion with a difference between those figures being pushed into 2024.

Steve Blastin: For our fourth quarter outlook, we expect consolidated earnings to be lower than the third quarter, with declines across all three segments. At the steel mills, we expect earnings to decrease compared to the third quarter results on lower realized prices and slightly lower volumes. Given that most of our sheet business is sold on contracts, recent improvements in pricing are not expected to improve average realized selling price until later in the quarter. In our steel product segment, we expect slower volumes and lower realized pricing as well. For the raw material segment, we expect lower earnings in the fourth quarter due to margin compression and planned outages that are DRI operations.

For our fourth quarter outlook, we expect consolidated earnings to be lower than the third quarter with declines across all three segments.

At the steel Mills, we expect earnings to decrease compared to the third quarter results on lower realized prices and slightly lower volumes.

Given that most of our sheet business is sold on contracts recent improvements in pricing are not expected to improve average realized selling price until later in the quarter.

In our steel products segment, we expect slower volumes and lower realized pricing as well.

For the raw materials segment, we expect lower earnings in the fourth quarter due to margin compression and planned outages at our <unk> operations.

Steve Blastin: Looking ahead into 2024, we have attractively priced backlogs into the second quarter for some of our steel products with continued strong order activity expected in manufacturing, data centers, and energy. So while we remain constructive over the long term due to expected secular demand drivers, near-term market conditions have softened. We attribute this to uncertainty arising from the United Auto Worker Strike, higher interest rates, credit tightening, elevated geopolitical risk, and concerned about another potential U.S, government shutdown. As of today, we expect the sequential declines in our fourth quarter earnings may exceed that of our third quarter decline.

Looking ahead into 2024, we have attractively priced backlog into the second quarter for some of our steel products with continued strong order activity expected in manufacturing data centers in energy.

So while we remain constructive over the long term due to expected secular demand drivers near term market conditions have softened.

We attribute this to uncertainty arising from the United Auto workers strike higher interest rates credit tightening elevated geopolitical risk and concerned about another potential U S government shutdown.

As of today, we expect the sequential declines in our fourth quarter earnings may exceed that of our third quarter decline.

Operator: With that, we'd like to hear from you and answer any questions you may have. Operator, please open the lines for Q&A. We will now begin the question and answer session. To ask a question, you may press star then one on your touch to your phone. If you are using a speaker phone, please pick up the handset before pressing the keys. To withdraw from the question, Q, please press star then two.

With that we'd like to hear from you and answering any questions. You may have operator, please open the lines for Q&A.

We will now begin the question and answer session.

Question You May Press Star then one on your Touchtone phone. If you are using a speakerphone. Please pick up your handset before pressing the key to withdraw from the question can you. Please press Star then one.

Tristan Gresser: The first question is from Tristan Gresser of BNP Parabakh. Please go ahead. Yes, hi. Thank you for taking my questions. The first one is on capital allocation. Could you remind us what is the place of organic growth in the strategy? I think you touched on potential M&A. I think in the past, you viewed M&A as more on the downstream side, but how do you view the upstream and how do you view the current that role market at the moment? That's my first question. Thank you.

Next question is from.

Congrats Sir of BNP Paribas. Please go ahead.

Yes, hi, Thank you for taking my questions.

The first one is on capital allocation could you could.

Could you remind us what is a place of inorganic growth.

<unk>.

I think you touched on potential M&A I think in the past you viewed M&A is more.

On the downstream side.

How do you view the upstream and how do you view the currents that rural market at the moment. That's my first question. Thank you.

Yes, Tristan I'll kick it off and maybe ask Steve to comment on maybe the second half of your question, but should we think about.

Leon Topalian: Yes, Tristan, I'll kick it off and maybe ask Steve to comment on maybe the second half of your question. But if we think about our mission statement that we started when I took over a CEO in 2020, it's to grow the core, expand beyond and live our culture. So as we think about growth, it's really against those two backdrops, growing our core, projects like our sheet mill and West Virginia, which again, we couldn't be more excited about at an incredible groundbreaking last week on Friday and last week with our team and the senators and local politicians.

Leon Topalian: And again, couldn't be more thrilled for the location of that, the proximity of that generating the highest praise and cleanliness of fields in that facility. Projects like Selecting to North Carolina are expansions in galvanizing and sheet and painted and galvanized. So that's the core. The other piece is the expanding beyond things like our investments in CHI and the overhead dorm business or racking or warehouse systems, the towers and structures, pieces of new core that are going to continue to generate more consistent earnings profiles, a higher high and again, a higher low, because, again, many of those businesses, as we think about the adjacency, Tristan R, that operate outside the traditional cyclicality of the normal steel curve that we've been a part of for so long.

Our mission statement that we started when I took over as CEO in 2020, it's to grow the core expand beyond and live our culture. So as we think about growth, it's really against those two backdrops growing our core projects like our sheet mill in West, Virginia, which again, we couldnt be more excited about at an incredible groundbreaking last week on fraud.

And as of last week.

Our team and the senators local politicians and again couldn't be more thrilled for the location of that the proximity of that generating the highest grades and cleanliness is feels in that facility.

So like Lexington, North Carolina, our expansions in galvanizing in sheet.

Painted galvanized so that's the core the other pieces the expanding beyond things like our investment in CACI and the overhead dorm business start racking, our warehouse systems to towers and structures pieces of Nucor.

More consistent earnings profile, a higher high and again a higher LOE.

Because again many of those businesses as we think about the Adjacencies Tristan are that operate outside the traditional cyclicality of the of the normal steel curve that we've been a partner for so long. So we're balancing that overall portfolio again balancing that.

Leon Topalian: So they're balancing that overall portfolio and balancing that return profile for our shareholders. And so those are our priorities as we think about, we've not broken out dollars to dollars on where we're going to spend X amount per cent in which bucket what we're doing is looking through, where do we bring value, where do we create economic value add, and how do we maximize each capital dollar into those projects that are going to come closer near double our cost of capital.

The return profile for our shareholders and so those are our priorities as we think about we have not broken out dollars to $1 on where we're going to spend X amount of percent in which bucket. What we're doing is working through where do we bring value where do we create economic value add and how do we maximize each.

Capital dollars into those projects that are going to come closer near double our cost of capital ultimately with the umbrella.

Leon Topalian: Ultimately with the umbrella, are they cultural fits for Nucor? Do they make sense because ultimately with drives Nucor, and every KPI that you see is the 32,000 men and women who make up this family. It is our culture that drives every result that our shareholders benefit from.

Are they cultural fits for Nucor do they make sense, because ultimately what drives nucor and every kpis that you see is the 32000 men and women who make up this family. It is our culture that drives every result that our shareholders benefit from.

Steve Blastin: Yeah, Tristan, the only thing I might add to what Leon said was you started the question with capital allocation, just as a reminder, Nucor has been, and Leon used the word balance. Balance is really the key summary there. We have a disciplined and consistent approach with returning capital back shareholders, which we have forced down for a number of years, reinvesting in our business. And your question was about how do we look at organic versus inorganic as flea on all your examples.

Interest and the only thing I might add too.

It was.

You started the question with capital allocation and just as a reminder.

Nucor has been.

The word balanced.

Balance is.

What are the key summary, there.

Disciplined.

<unk> approach.

Returning capital back to shareholders, which we unfortunately for a number of years.

Reinvesting in our business.

Steve Blastin: You can see that we take advantage of our opportunity where we can create value. So we don't, we don't expressly have an inorganic or M&A strategy, we have a strategy in M&A of a tool by which we use the effort in that strategy.

Question was about how do we look at organic versus inorganic.

Some examples.

<unk> as you can see that we can take advantage of opportunity, where we can create value. So we don't we don't express we have an organic or M&A strategy, you can kind of strategy and M&A as a tool by which we use.

Energy.

Alright, that's that's.

Leon Topalian: All right, that's clear and helpful. Maybe a quick follow-up on that, but when you look at M&A, are there particular red lines, I mean, the sense of on the upstream side, is there potentially interest to go on certain upstream asset to get certain types of grades and quality? I think one of your peer earlier mentioned that the federal market was was pretty fragmented. Is that also something of you you share? Tristan, the short answer is yes.

That's clear and helpful.

Maybe a quick follow up on that but when you look at M&A are there particular red lines.

Yeah.

Incentives on the upstream side is there.

Potentially interest you go on sort of an upstream asset you get certain types of grades and quality I think one of your peer earlier mentioned that the flat roll market, which was pretty fragmented is that also something.

Sure.

Yes, Tristan these the short answer is yes, if you think about all of that and another 100 variables ups.

Leon Topalian: So you think about all of that in another hundred variables of upstream product differentiation, other materials. Nucor is in our team in the M&A team review that consistently and we've looked. And again, one of the great things about having a comprehensive strategy it informs you as much about what you're not going to do is what you are. So the things that we've made and the investments that I've just highlighted are really reflective of the opportunities that we're going to continue to look for in the pipelines of those mega trends that are existing in our product.

Upstream product differentiation.

Other materials Nucor is.

Our team in M&A team review that consistently and we've looked and again one of the great things about having a comprehensive strategy. It informs you as much about what you are not going to do is what you are seeing the things that we've made and the investments that I've. Just highlighted are really reflective of the opportunities that we're going to continue to look for and the pipelines are those.

Mega trends that are existing in our.

Leon Topalian: They're going to provide a different value proposition for our customers. So the mega trends like towers and structures, the opportunities and sustainability and the iconic feel that we're making with zero net carbon footprints, how are we thinking about the manufacturing build out of EVs, battery plants, data centers that again, Nucor is really well positioned and show what I would tell you is all the things you mentioned come into the filtering of how we're thinking about M&A.

They're going to provide a differentiated value proposition for our customers. So the megatrends like towers and structures the opportunities in sustainability.

<unk> feel that we're making with zero net carbon footprint. How are we thinking about the manufacturing build out of EV battery plants Datacenters that nucor is really well positioned.

And so what I would tell you is all of the things you mentioned come into the filtering of how we're thinking about M&A, but ultimately what Steve and I. Just mentioned are the drivers of can we create EMEA for every dollar invested is going to return well above our cost of capital to our shareholders and also giving us a.

Leon Topalian: But ultimately, which Steve and I just mentioned are the drivers of can we create EVA for every dollar invested that is going to return well above our cost of capital to our shareholders. And also giving us a opportunity to, again, improve the overall volatility of our early profile through cycle performance is much more consistent over the long-term.

Opportunity to again improve the overall volatility of our earnings profile through our through cycle performance is much more consistent over the long term.

Tristan Gresser: All right, that's very clear. Thank you.

Alright.

That's very clear thank you and if I might just have a follow up on the rebar market.

Speaker: If I may just have a follow-up on the rebar market, you just announce you're looking for some investment there. Yeah, basically, what are you seeing in the terms of supply and demand? I know there's been a lot of project being announced, but I'm not sure if they're going through with, you know, the interest rate being where they are. So how comfortable are you with the medium term supply and demand balance you're seeing on the rebar market to make this type of investment? Thank you.

You just announced you're looking for some investment there.

Yes, basically what are you seeing in terms of supply and demand Egypt, I know theres been a lot of project Dia announced but im not sure if there.

Going through with <unk>.

Interest rates being where they are so how comfortable are you with the medium term supply and demand balance youre seeing on the rebar market too to make this cycle of investments. Thank you.

Yes, Tristan I'll start it off and maybe ask John Hollister EVP over our products to comment as well, but look we announced in the exploration that we're going to look into the Pacific northwest as we think about what we've done in the bar group itself.

Leon Topalian: Yeah, Chris, now I'll start it off and maybe ask John Hollatz or EVP over our products to come in as well, but look where we announced an exploration that we're going to look into the Pacific Northwest as we think about what we've done in the bar group itself in the, our footprint in rebarred significant. And so, you know, in the micro-mil strategies, and what we're going to be seeing in Sedalean, Frostproof, and now what we're going to see come online in 25 and Lexington, Northern Carolina.

Our footprint in rebar, it's significant and so.

The micro mill strategies, and what we've seen in Sedalia Frost proof and now what we're going to see come online and 25% in Lexington, North Carolina. It gives us an awful lot of excitement and optimism, but so do all of our other facilities that are running rebar.

Leon Topalian: It gives us an awful lot of excitement and optimism, but so do all our other facilities that are running rebar. So, the market's growing. We know that we know it's going to grow similar to that two million ton range into your point. There's a lot of announced capacity, not sure all of that, nor see flight of day, but again, we know the Pacific Northwest. We have our Seattle operations plan. It's been running a long time and consistently one of our great financial performer and return of the team there does an amazing job.

The market is growing we know that we know it's going to grow somewhere in that 2 million tonne range.

Your point, there is a lot of announced capacity.

I'm not sure all of that in the light of day, but again, we know the Pacific Northwest, We we have our Seattle operations play out it's been running a long time consistently one of our.

Great financial performer and return to the team there does an amazing job and so we know the customers are we know the growth thats going to be there again, we think it will.

Leon Topalian: And so, we know the customers there. We know the growth that's going to be there. And again, we think it holds a great deal of promises. We evaluate this in the coming months, John. Yeah, thank you, Leon. And Leon mentioned we're really proud of what our Seattle team has delivered since we bought that mill with the acquisition of Birmingham Steel in 2002. And our team has also done a really good job of positioning us for future success in this market.

A great deal of promise as we evaluate this in the coming months.

Yes. Thank you.

Well I've mentioned, we're really proud of what our Seattle team has delivered since we bought that mill with the acquisition of Birmingham.

2002.

And our team has also done a really good job of.

Turning to us for future success in this market.

Leon Topalian: We're really optimistic about the growth opportunities that we see in the Pacific Northwest. And in the Canadian markets, the challenge that we face with our Seattle facility is it's been in its current location since 1905. And the mill sits on a very small footprint. Over the last century, the city has really grown around us, which has limited our ability to grow our capacity and our capability. So the strategy here is really to position new core force success for the next 50 years to take advantage of the cost and the efficiencies that we've experienced with our micro mill technology, as well as increasing our product offerings.

We're really optimistic about the growth opportunities that we see in the Pacific northwest and in the Canadian markets.

<unk> that we face with our Seattle facility.

Ben its current location.

And the mill sits on a very small footprint.

Over the last century city has really grown around us, which has limited our ability to grow our capacity and our capabilities. So the strategy here is really to position Nucor for success for the next 50 years to take advantage of the cost and the efficiencies that we've experienced with our <unk>.

Micro mill technology, as well as increasing our product offerings, we are certainly well aware of.

Leon Topalian: We're certainly well aware of all of the other mills that have been announced. We're following those projects closely. We're really not in a position to speak on that, but we're excited about what we're doing in Kingman. We're excited about what we have coming up in lessons as well.

All of the other mills that have been announced we're following those projects closely we're really not in a position so to speak on that but we're excited about what we're doing at kingdon. We're.

We're excited about what we have coming up.

Well.

Alright, I appreciate the color. Thank you very much.

John Hollatz: All right, I appreciate the color. Thank you very much.

Carlos Alba: The next question is from Carlos, the Alba of Morgan Stanley. Please go ahead. Yeah, good morning, everyone. And so on the still products, the still fabrication business, you did mention the profitability has moderated, although it remains quite strong above pre-covered levels. Can you provide a little bit more color regarding your or the book, your backlog, where does it extend to? Any sort of magnitude of the potential disseleration, continued disseleration, if that is what you're seeing in the fourth quarter and perhaps into the 2020 four year in terms of pricing and volumes, anything will be quite important for us.

The next question is from Carlos de Alba of Morgan Stanley . Please go ahead.

Yes, good morning, everyone.

Just so on the steel products and steel fabrication business.

Judy had mentioned.

It has moderated although it remains quite strong.

Pre COVID-19 levels can you provide any more color regarding Europe or the book your backlog what does it extend to any sort of magnitude of the potential deceleration continued deceleration if that is what youre seeing in the fourth quarter number housing too into therefore.

Four years in terms of pricing and volumes anything will be quite quick.

Important for us.

Carlos Alba: Carlos, thanks for the question. I'll kick it off and then maybe ask Brad Tree to comment. Obviously, we're not going to give you a pricing speculation into the, you know, back half of this year in door 2024, but here's what I would tell you in that. I think context becomes really important as we talk about our steel products segment of our business. Again, it's generating now 40% of our overall net earnings, and that's been an incredible opportunity for Nucor.

Yes, Carlos Thanks for the question I'll kick it off and then maybe ask Bryan to comment obviously, you were not going to give you pricing speculation into.

And to the back half of this year and or 2024, but here's what I would tell you that I think context becomes really important as we talk about our steel products segment of our business again, it's generating now 40% of our overall net earnings and Thats been an incredible opportunity for Nucor, we've had seven straight quarters.

Carlos Alba: We've had seven straight quarters where they generated a billion dollars or more. And so again, over the last seven quarters, they've generated $7 billion in earnings. It's been an incredible platform for us to continue to grow and continue to think about that diversity of makes that we bring to the marketplace. But it is softening. It is coming down from our peak highs and historic highs and 21-22 season. And so again, they're moderating, but there's no cliff.

<unk>.

Where they've generated $1 billion or more and so again over the last seven quarters, we've generated $7 billion.

And earnings it's been an incredible.

Platform for us to continue to grow and continue to think about.

That diversity makes that we bring to the marketplace, but it is softening it is coming down from our peak highs and historic highs.

'twenty, one 'twenty two season, and so again they are moderating, but there is no cliff we're not seeing this the order books dry up we're seeing some softening in backlogs, but again as compared to sort of pre pandemic levels.

Carlos Alba: We're not seeing the order books dry up. We're seeing some softening and backlogs. But again, as compared to sort of pre-pandemic levels, those backlogs are up 25% still over that period of time. So again, it's softening, but I would tell you that we're still optimistic about, you know, as we finish 2023 and head into 24, some of those backlogs are extending out into Q2 already with favorable pricing. So Brad, do you want to add any more detail on that?

Backlogs are up 20%, 25% still over that period of time.

So again, it's it's.

Softening, but I would tell you that we're still.

Optimistic about.

As we finished 2023 and head into 'twenty four and some of those backlogs are extending out into into Q2 already.

With favorable pricing ship, Brad do you want to add any more detail on that yes.

Carlos Alba: Yeah, basically, I mentioned backlogs have come down some, but are still well above pre-pandemic levels. We have strong pricing in our backlogs. We'll see some seasonal slowdown as we normally do this time of year. But we'll still have great results and strong earnings in Q4. No, one thing I would mention in addition is our diverse product portfolio continues to differentiate in for what we saw moderating pricing and volume mainly driven by warehouse demand in our joints and deck business.

Yes.

As Lee mentioned.

Backlogs have come down some but are still well above <unk>.

Pre pandemic levels, we have we have strong pricing in our backlog.

We will see some seasonal slowdown.

As we normally do this time of year.

But we'll still have great results and strong earnings in Q4.

One thing I would mentioned in addition, as our diverse product portfolio continues to differentiate anymore.

We saw a moderating pricing and volume mainly driven by warehouse demand in our joist and deck business.

Carlos Alba: We saw near record and record earnings in our pre-pandemic level buildings businesses are insulated metal panel business and rebar fab, all three and stronger earnings quarter over quarter. And again, we'll see some seasonal slowdown in construction, but we really believe there's been a structural shift in the earnings profile of our fab product businesses. The other thing we're seeing is a lot of cross-selling opportunities. We're bringing multi-product solutions to our customers that bring value to them, bring value to new core in a way that we've never done in the past. All right, thanks for that.

Saad near record and record earnings and our pre engineered metal buildings businesses, our insulated metal panel business that rebar fab.

All three had stronger earnings quarter over quarter.

And again, we will see some seasonal slowdown in construction, but we really believe there's been a structural shift in the earnings profile of our product businesses.

The other thing we're seeing is a lot of cross selling opportunities, we're bringing multi product solution.

To our customers that bring value to them great value to do more in a way that we've never done in the past.

Alright, thanks for that and just.

Leon Topalian: If I could maybe present on the point, what do you think has changed versus pre-pandemic conditions that have allowed the company to command a much higher price and therefore much higher margins than it did in the past? Can you point us to something fundamentally different than what we had before because the construction market is often in as you mentioned. So wouldn't that potentially make the market a little bit looser and therefore?

If I could maybe for <unk> on the point.

He has change.

Versus pre pandemic.

Conditions that has allowed the company to command a much higher price and therefore, much higher margins than it did in the past is there any can you point us to something fundamentally different than what we had before because the construction market is softening as you mentioned so.

Wouldn't that potentially make the market a little bit looser and therefore.

Yes.

Leon Topalian: Did you use your pricing? Carlos, look, what I would touch on immediately out of the gate is what Brad just mentioned, which is, you know, our product breath is a key differentiator. So, again, we're not in under Dan Needham in the entire commercial team at Nucor. We're approaching that market to look and say, how do we provide a solution set, not just provide and sell a product? So our teams, our construction solutions group, our energy solutions groups are going out now and meeting with customers, attaching them to maybe areas and products that weren't traditionally purchased, either Mill Direct or that weren't coupled together that we now can bring to bear as an entire offering to provide a solution set, you know, as we think about the manufacturing build-out, warehouse build-out, how do we now look to offer, again, the complete solution, not just in peace or part-on in product of?

We've used your pricing.

Carlos.

I would touch on immediately out of the gate is what Brad just mentioned which is.

Our our product breadth is a key differentiator so again, we're not.

Under Dan need them and the entire commercial team at Nucor, we are approaching that market to look and say how do we provide a solution set not just provides and sell a product. So our teams our construction solutions group our energy solutions groups are going out now and meeting with customers attaching them to maybe areas and product set werent tradition.

Really purchased either mill direct or.

That coupled together that we now can bring to bear as an entire offering to provide a solution set as we think about the manufacturing build out warehouse build out how do we now look to offer again that complete solution not just a piece or part out in product out and so I would tell you that is gaining a lot of traction.

Leon Topalian: And so I would tell you, that is gaining a lot of traction and intention. The other piece is the sustainability. You know, there's a lot of people that are trademarked and branded their products in the green space, but very few, if any, in the world, at our scale. And so the scale of which we're running our iconic products and natural products today is getting a lot of attention and not just through the OEMs and automotive.

And attention the other pieces the sustainability.

There's a lot of people that a trademark in branded.

There are products in the green space, but very few if any in the world at our scale and show the scale of which we are running our iconic products in nature of products today is getting a lot of attention and not just through the Oems and automotive its a much more diverse.

Leon Topalian: It's a much more diverse customer set today that we're seeing that are demanding those products. Anything I'm visiting. Great, thank you. I'm sorry, sorry. One other element to that, you'll recall, you followed us for a long time, but you called, took some actions several years ago to restructure a few different businesses in that downstream steel products group. And while that's not something we really love doing, the teams did a wonderful job to bring efficiency.

Customer set today that we're seeing that are demanding those products.

Mystic.

Great. Thank you.

I'm sorry, sorry go ahead.

Sorry.

One other element to that Youll recall, you've followed us for a long time.

Nucor took some actions several years ago to restructure a few different businesses in that downstream.

Steel products group and while that's not something we really love doing.

Teams did a wonderful job too.

Bring efficiencies within our own system.

But the predominant reason this exactly what Leon outlined.

Alright, great. Thank you.

Bill Peterson: The next question is from Bill Peterson of J.P.

Thanks Charles.

The next question is from Bill Peterson of Jpmorgan. Please go ahead.

Bill Peterson: Morgan, please go ahead. Yeah, hi, thanks for taking the questions. A couple, I guess, market related questions. So if we think about the steel market today, trying to get a sense of how you're anticipating the market reactions to, you know, the prolonged UAW. Maybe strike versus maybe an immediate end. And especially in the context of, you know, we've seen some, you know, no discipline in the past few months. You know, some of the maintenance extended just to get a sense of how the reaction would be and under those scenarios.

Yes, hi, thanks for taking the questions a couple I guess market related questions. So if you think about the steel market today I'm trying to get a sense of how you are anticipating the market reactions to.

The prolonged.

Kw strike versus maybe an immediate and especially in the context of that.

We've seen some mill discipline in the past few months.

Some of the maintenance extended just to get a sense of how how the reaction would be an under those two scenarios.

Okay.

Leon Topalian: Yeah, I'll start us off with the first one. And I'm not sure I fully caught the second part of the question, Bill. But, you know, if I don't, please just re-ass that second half. New course exposure to automotive today is about a million and a half tons. So we don't, you know, that's five or six percent of our overall volume. So it's not a huge exposure for us to regularly. Obviously we're watching in the automotive sector in the United States and the US economy will potentially the longer it goes, having more profound impact to the overall industry.

Yes, I'll start us off with the first one and I'm not sure.

Fully caught the second part of the question Bill.

If I don't please just re ask that second half.

Nucor's exposure to automotive today is about $1 billion five tons.

Leon Topalian: But, you know, the part that New Corps remains excited and very committed to is to doubling that capacity over the next three to five years to moving from one and a half million tons to about three million tons overall volume and footprint in, and both the last several, we've continued to grow. We've continued to invent ourselves as a preferred supplier. We've now won the GM supplier of the year award for the last four straight years.

So we don't that's five or 6% of our overall volume so it's not a huge exposure for us directly.

Obviously, we're watching in the automotive sector in the United States in the U S economy.

<unk>.

Potentially the longer does have a more profound impact to the overall industry, but.

Part that Nucor remains excited and very committed to is to doubling that capacity over the next three to five years to moving from one 5 million tonnes to about 3 million tons of our overall volume and footprint.

Over the last several we've continued to grow we've continued to embed ourselves as.

The preferred supplier.

Now one the GM supplier of the year Award.

For the last four straight years so.

Leon Topalian: And so we're excited about those things. We're excited about what our teams are doing to create some of the most advanced high strength fields in the marketplace. And again, despite some of the rhetoric coming from other competitors, Nucor's position incredibly well to make the most advanced grades that they are required by the US Auto industry. So ultimately if you're asking in the broader context, the longer this goes, the more impact we're going to see in the overall economy, not having a massive impact to the overall Nucor footprint.

We're excited about those things we're excited about what our teams are doing to create some of the most advanced high strength steels in the marketplace.

Despite some of the rhetoric coming from.

Other competitors nucor's position incredibly well to make the most advanced grades.

Our required by the U S auto industry. So.

No.

Ultimately if you are asking in the broader context of the longer. This goes the more impact we're going to see in the overall economy not not having a.

Massive impact to the overall nucor footprint, but again I hope this <unk>.

Leon Topalian: But again, I hope this ends quickly and we can move forward and continue to generate. There's a lot of demand out there, even in spite of the spread. I think the overall expectation is in that, you know, 15.2 or 3 million units to be produced for 2023. And hopefully we can get back on track and continue to supply into that market.

And as quickly and we can move forward and continue to generate theres a lot of demand out there even in spite of the strike I think the overall expectation is in that $15, 2% or 3 million units to be produced for 2023, and hopefully we can get back on track and continue to.

To supply into that market.

Yes that addresses the question.

Steve Blastin: Yeah, no, that that just the question had a question on cat. So you talked about the cat, but not projected at 2.4 billion versus prior to three. I guess, how should we start thinking about next year? I guess would be additional 600 million. And I guess even maybe out a few years, what is the normalized level, you know, start to look like for the company, given the projects you've outlined?

I had a question on Capex you talked about Capex now projected at $2 4 billion versus prior three I guess, how should we start thinking about next year I guess, what the additional $600 million and I guess, even maybe out a few years what is the normalized level start to look like for the company given the projects.

Outlined.

Okay.

Hey, Bill Thanks for the question.

Steve Blastin: Hey, Bill. Thanks for the question. So I think it's a good indicator. First, first of all, we'll give guidance on the year after we get approval from our board on capital spending, which we do at the end of every year. So the state soon on our next call, you know, we'll give a more precise update. But directionally, you should assume that our capital spending will be heavier than historic averages. When you look at the pipeline, some of the bigger projects coming coming through right now, you can see that we're going to be spending more over the next year or two.

So I think it's a good indicator for US first of all we'll give guidance for the year. After we get approval from our board on capital spending, which we do at the end of every year. So.

Stay tuned on our next call.

<unk> will give a more precise update but directionally.

Shouldn't assume that our capital spending will be heavier than historic averages. When you look at the pipeline and some of the bigger projects.

In theory right now.

You can see that we are going to be spending more over the next year or two.

And then just as a framework item for you to help you in some of your modeling or our maintenance Capex, what we consider maintenance, which would include spares and safety related capex as well and that is probably somewhere around $600 million a year.

Steve Blastin: And then just as a framework item for you to help you in some of your modeling are are maintenance, capex, what we consider maintenance, which would include spares and safety related, capex as well. And that is, you know, probably somewhere around 600 million a year, we have given a little bit of the investor relations team put out the slide deck sometime around the first or second quarter that showed some of the larger product projects. How much is getting spent this year versus next year. So you can use that as a good framework for estimating your next year, next year.

Bill Peterson: Great. Thanks for that.

We have given a little bit of.

The Investor Relations team put up the slide deck some time.

I think around the first or second quarter that showed some of the larger products projects. How much is getting spent this year versus next year. So you can use that as a good framework for estimating your next year next year fee.

Great. Thanks for that and if I could sneak one more kind of again a bigger picture.

Bill Peterson: If I could speak one more kind of again, a bigger picture. You know, we were aware that the US maybe looking to remove the EU tariff rate quotas and understanding that nothing was concluded at this time and it remains fluid. I guess how would you see this impact impact in the US steel market. I guess what are the potential outcomes should the quotas be increased and asking the context that new quotas obviously in an important part of the US steel market.

We are aware that the U S. Maybe looking to remove the EU tariff rate quota.

Understanding that nothing was concluded at this time and it remains fluid.

I guess, how would you see this impacting impacting the U S steel market.

I guess what are the potential outcomes should the quotas be increased I'm asking in the context of nucor's. It's obviously an important part of a huge part of the U S steel market.

Leon Topalian: Yeah, Bill. Well, there's a lot going on. You know, the talks today with the global arrangement in the European Union. And, you know, again, we've seen over the last really three years. Us moved from from a tariff to a tariff rate quoted. And again, the important picture really has been pretty consistent over the last several years. Probably still a little high in some areas, but, you know, that 2021, 22% of the overall market.

Yes Bill.

Leon Topalian: Again, I think a healthier numbers and a 15, 16. But I don't see a material change because we have it when we watched the US MCA get crafted the course agreement with Korea, and the agreements with Brazil and other nations. We've not seen that open up the floodgates. One of the bright spots, I've commented too many times. The confidence that we have, and I have in Secretary Romando, or Comer Secretary, or USTR in Catharty, her counsel in Greta Pike, they are very accomplished leaders and they know this industry incredibly well.

Going on the.

Talks today with a global arrangement in the European Union.

Again, we've seen over the last really three years.

US move from from a tariff to a tariff rate quoted and again the important picture really it's been pretty consistent over the last several years, probably still a little high in some areas, but that 2021, 22% of the overall market.

Again, I think a healthier numbers in that 15 to 16, but I don't see a material change because we havent when we watch.

U S MCA get drafted the course agreement with Korea.

The agreements with Brazil, and other nations, we have not seen that opened up the floodgates one of the bright spots.

Yes.

Commented too many times the.

The confidence that we have and I have and secretary Rimando.

Commerce Secretary or USTR and Catherine tie.

Her counsel and granted they are very.

<unk> accomplished leaders and they know this industry incredibly well.

Leon Topalian: Nucor will remain a tireless advocate. To make sure we create a level playing field in the United States, and again, those three leaders really understand this industry well, and you're doing a really nice job of making sure that shifting to a TRQ does not open up the floodgates to see a massive uptick and dumping of believely or subsidized fields into the US.

Nucor will remain a tireless advocate to make sure.

We create a level playing field in the United States and again those three leaders really understand this industry, well and Youre doing a really nice job of making sure that shifting to a <unk> just not opened up the floodgates to see.

A massive uptick in dumping of illegally subsidized deals into the U S.

Yes, thanks for those insights.

Thanks, Phil.

Martin Englert: The next question is from Martin Angler of Seaport. Please go ahead.

The next question is from Martin Englert Seaport. Please go ahead.

Martin Englert: Hello, good morning, everyone. Morning. I simply just feel conversion costs for the court of aid increase to around, I think, 518 per ton. And while I understand some of it includes some substrate costs, can you discuss some of the sequential impacts from the changes, qualitatively, both on anything to do with substrate, as well as the true underlying conversion costs. I think you alluded to some of this related to the lower utilization quarter on quarter in your prepared remarks as well.

Hello, Good morning, everyone.

Good morning.

Yes.

Estimated steel conversion costs.

For the quarter increased to around 518 per ton.

Well I understand some of it includes some substrate costs.

Can you discuss some of the sequential impacts from the changes.

Qualitatively bolt on anything.

Anything to do with substrate as well as the true underlying conversion costs I think you alluded to some of this related to the lower utilization quarter on quarter in your prepared remarks as well.

Martin Englert: Hey, Martin, thanks for the question. I think you sounded up actually pretty well. Utilization rates have a big impact on the cost that's a major driver and the highlight of that. We also saw a cost increase in energy supplies and services and facilities. So there's a sort of product category that we saw the increases quarter or quarter. I think what's important to Martin is keep in mind in general when you look year over year, conversion costs are down.

Hey, Mark Thanks for the question.

I think you summed it up actually pretty well.

Alization rates have a big impact on the costs.

Yes.

That's a major driver and you highlighted that we also saw cost increases.

<unk>.

Supplies and services.

So there's a sort of product categories that we saw.

Kris was quarter over quarter, I think what's important to Martin is to keep in mind in general when you look year over year conversion costs are down and I think thats encouraging against the backdrop of what we would have had we were having this conversation a year ago. We were all concerned about inflationary pressures and the cost of those.

Martin Englert: And I think that's encouraging against the backdrop of what we would have had. You know, we were having this conversation a year ago, we were all concerned about inflationary pressures in the cost system. Those appear to have moderated notwithstanding the quarter of a quarter changes we did, which were predominantly due to our own production choices of the company. The helpful. Okay. It's helpful. Anything with a bit sort of substrate costs or not material impact quarter on quarter.

Peer to moderated.

Notwithstanding the quarter over quarter changes.

Which were predominantly due to our own production choices as a company.

That's helpful.

Thats helpful.

Anything with.

Substrate costs or not a material impact quarter on quarter.

By substrate, you mean raw materials.

Martin Englert: By substrate, you mean raw materials? Meaning when you have to prepare the western assets there are the approaches substrate to run across them. That wouldn't I don't think it's captured in the Ferris costs, right? Yes, that's correct, Martin. That's a good point. The flat purchases at CSI, we record in sumables, not in the raw materials. So that does have an impact. And so that's part of the change you're seeing. It's not reflected in the raw materials.

Meaning when you have to.

Sure.

Western assets.

Subsequent to run across.

I'm not sure there's a need service cost right.

Yes.

Correct, Mark that's a good point.

Slab purchases at CSI, we record in consumables not in the raw material. So that does have an impact and.

So that's part of the change Youre seeing thats not reflected in the.

Raw material.

Martin Englert: That's correct now. Thomas. Okay, got it. And just kind of arcing to your comments about inflation and the implications there and the concerns a year ago, I guess, you know, when looking back at conversion costs in the back half of last year, you know, presumably there's some, you called it out in the kind of qualitative guidance, lower volumes and dissipated in the steel business quarter on quarter all over utilization. So probably some uptick in conversion costs, net, net, although, you know, he's highlighted this quarter, they were below where they were out a year ago in the comparable period.

Scrap numbers.

Okay got it.

And just kind of marching to your comments about installation and the implications there and concerns a year ago I guess when looking back at conversion costs in the back half of last year.

Presumably there's some you called it out.

Well to give guidance.

Your volumes anticipated business quarter on quarter of lower utilization.

Probably some up tick in conversion costs.

No.

Highlighted this quarter they were below where they were at a year ago in the comparable period.

Martin Englert: Is that kind of the right framework to be thinking about? Yeah, I think, I think, Martin, if you were, if you're modeling out for the fourth quarter, you might see more close to flat cost quarter or rather than an uptick, continued uptick. That's just because of where you see some of the trends, for example, you look at things like she is likely has bottomed out at this point. So that has an impact on the system and how cost will be our system. So, you may see, you may not see the same rate of increase on a per ton basis going in the fourth quarter and so on third quarter. Understood.

To the right framework to be thinking about.

Yes.

Yes, I think I think Barton if youre, if youre modeling out for the fourth quarter, you might see more close to flat.

Flat costs quarter over quarter, rather than an uptick continued uptick.

Just because we are.

Sure.

You see some of the transfer for example, you look at things like sheet likely has bottomed out at this point so.

That hasnt impact on on on the system and how cost flow for your assistance.

You may see.

You may not see the same rate of increase on a per ton basis going into the fourth quarter and so on third quarter.

Understood.

Could we briefly discussed seasonality in <unk> within the steel business.

Martin Englert: Could we briefly discuss seasonality in 4Q within the steel business? Recent years, some of the sequential declines have been rather steep in excess of 10% but before that it was kind of around mid-single digits and I think you had commented and prepared remarks earlier in the discussion about anticipating maybe a small sequential decline in volumes in the fourth quarter here. Any other color to add there or thoughts? Yeah, Martin, I think from what we said today with what, you know, a brand highlighted some comments about downstream products, order book and backlog and where we said, I think the trends being closer to those historic averages rather than some of the volatility saw over the last year or two is probably at your statement.

Recent years some of the sequential decline.

Steve in excess of 10%, but before that it was kind of around mid single digits and I think.

Comment.

Remarks.

Earlier in the discussion.

Maybe.

Small sequential decline in volumes.

Fourth quarter here any other color there.

Or thoughts.

Yeah, Hey, Martin I think.

From where we sit today with what.

Brad highlighted.

Some comments about downstream products order book and backlog right.

I think those.

Trends being closer to historic averages rather than some of the volatility so over the last year or two.

Accurate statement.

Okay.

Martin Englert: Okay. If I could one last one and again this kind of comes back to some of the prepared remarks on expecting declines and pricing across the three business segments into 4Q here, but specifically narrowing in on steel products here. You know, it was a fairly small decline of about $47 per ton sequentially thinking about, you know, the commentary on the backlogs extending into next year and still good pricing off from peak, but any color regarding the cadence of steel products pricing, 4Q versus 3Q whether it would be something on our bronze $50 or something differing in magnitude.

If I could one last one.

When it comes back to some of the prepared remarks on expecting declines on pricing across the three business segments into four Q here.

Specifically narrowing in on steel products here.

Yes.

Certainly small declines of about $47 per ton.

So on Chile.

Thinking about.

The commentary on the backlog extending into next year and still good pricing awesome peak, but any color regarding the cadence.

Steel products pricing.

<unk> versus <unk>, whether it would be something on or around $50 or something different in magnitude.

Hey, Mark it's Lee.

Martin Englert: Craig Martin, I don't know. We're going to provide you any more color on pricing. Again, I think what we tried to indicate is, again, we see some of that softest as we head into the last quarter of this year. But again, context, particularly in our steel products that has generated incredible returns, coupled with Brad's comments earlier, which was to say there has been a fundamental shift in that overall market where we've seen a different reset in the pricing levels that we believe are more sustainable.

We're going to provide you any more color on pricing outlook.

Martin Englert: So again, while we see some softest heading into the last quarter, again, the resiliency of that sector has been remarkable, you know, getting all the way back to the pandemic. So again, we see that as one of our strongest performers as we move into 2024 and that to continue to be the case. Okay, I appreciate all the color and nice job navigating the down market. Thank you. Thanks, Martin.

I think what we try to indicate is.

Again, we see some of that softness as we head into the last quarter of this year, but again context, particularly in our steel products that is generated incredible returns coupled with brad's comments earlier, which was to say there has been a fundamental shift.

In that overall market, where we've seen a.

Okay.

Different reset in the pricing levels that.

We believe our more sustainable so again, while we see some softness heading into the last quarter again, the resiliency of that sector has been remarkable.

All the way back to the pandemic so.

We see that as one of our strongest performers as we move.

Into 2020 for that to continue to be the case.

Okay I appreciate all the color and nice job navigating the dawn market. Thank you.

Thanks Martin.

The next question is from <unk> <unk> of BMO capital markets. Please go ahead.

Katja Jancic: The next question is from Katja Jancic of BMO Capital Markets. Please go ahead. Hi, thank you for taking my question.

Hi, Thank you for taking my question quickly on the Brandenburg plate mill can you, let us know what the production level was this quarter and how we should think about the ramp up.

Alvar: Quickly on the Brandon Burke Plate Mill, can you let us know what the production level was this quarter and how we should think about the ramp up at the mill in 4Q and also in to next year? Yeah, Katja, this is Alvar. Happy to thank you for the questions. You know, just so comments around the ramp up in Brandon Burke first that there's a lot of things that are going quite well with the capabilities of the mill.

At the mill in <unk> and also into next year.

Yes, Scott this is out there.

Thank you for the questions.

Just some comments around the ramp up in Brandenburg first that there is a lot of things that are going quite well with the capabilities of the middle of that was the strategy for us to build Brandenburg was to broaden our capability in place and we've had several milestones in the quarter, we brand the Castro to its full set of capabilities with crossroads played almost the full width of.

Alvar: That was the strategy for us to build Brandon Burke was to broaden our capability of the plate. And we've been several milestones in the quarter. We've burned the casters to its full set of capabilities. We've cross-rolled plate almost to the full width of the mill, which is 168 inches. We've commissioned our continuous key-tree blinds. So the team continues to work really, really hard on hitting some key milestones. You know, it's about volume.

The mill, which is 168 inches.

We have commissioned our continuous heat treat line. So the team continues to work really really hard on hitting some key milestones you asked about volume we guided to about 300000 tons in the second half we're going to be under that will probably be closer to a 160000 tons.

Alvar: You know, we guided to about 300,000 tons in the second half. We're going to 160,000 tons. Part of that's just due to the complexity of the mill itself. And there's a good complexity, there's software complexity and automation. Part of that's also a strategic decision for us to make sure we're using Brandon Burke to its strategic intent, which was to go after parts of the market where we couldn't compete. So rather than hitting volume targets and impacting the returns that are other two plate mills, because we operate a portfolio of plate mills.

Part of that's just due to the complexity of the mill itself and there is equipment complexity of their software complexity and automation part of that is also a strategic decision for us to make sure. We're using Brandenburg too it's strategic it's Ed which was to go after parts of the market, where we couldnt compete so rather than hitting volume targets in.

Impacting the returns at our other mills, because we operate a portfolio of plate mill in Brandenburg as an important part of it but there's two other legs to that stool.

Alvar: Brandon Burke is an important part of it, but there's two other legs to that stool. We want to be really strategic on how we bring those tons forward. So that's the best number I could give you for the second half is about 160,000 tons total. And then we're headed in the next year after that.

Wanted to be really strategic on how we bring those tons forward. So that's the best number I can give you for the second half is about 160000 tons total.

And then we're headed into next year after that.

And for next year is there any color you can provide about the ramp up.

Alvar: And for next year, is there any color you can provide about the ramp up or how much it could produce? Yeah, I would say we'd be closer to what we would have intended for the run right through this half. I think we'll be not the north of half a million tons for the year and probably more than that, but we'll continue to stay focused on driving incremental return through the group and being a strategic as we can about using those tons to our best strategic Perfect.

Or how much it could produce.

Yes.

I would say it wouldn't be closer to what we would've intended for the run rate through this half I think we'll be up north of 5 million tons for the year and probably more than that but we will continue to stay focused on driving incremental returns for the group that would be strategic as we can about using those tons to our best strategic advantage.

Perfect. Thank you and just quickly on the tax rate. It seems like the tax rate. This quarter was it a little lower how should we think about it in four Q is there anything.

Speaker: I think, and just quickly on the tax rate, it seems like the tax rate this quarter was a little lower. How should we think about it in 4Q? Is there anything we should be thinking about there? I think the guidance on the tax rate is, you know, that don't move around a little bit with how you believe the year is going to end up. So you pay, you pay your taxes quarterly but it's based on a annual estimate. So I'll let you use your own modeling to estimate what you think the fourth quarter is.

Speaker: Okay. Thank you very much.

We should be thinking about there.

Yes.

I think the guidance on the on the tax rate is.

Move around a little bit with.

With how you believe the year is going to end up.

You pay your taxes quarterly.

Based on our annual estimates so I'll, let you.

Use your own modeling to estimate what do you think the fourth quarter is.

Okay. Thank you very much.

Phil Gibbs: The next question is from Phil Gibbs, the key bank capital market. Thank you. Good morning.

The next question is from Phil Gibbs with Keybanc capital markets go ahead.

Hey, good morning.

Well.

Steve I just wanted to qualify the comment you made about the fourth quarter.

Phil Gibbs: Steve, I just wanted to qualify the comment you made about the fourth quarter. Is there a decline being more than that of the third quarter decline on a sequential basis? Were you talking about absolute EBITDA dollars or were you talking about more of a percentage? Hey Phil, thanks for the question. And on the fourth quarter outlook, that's really more about the total EBITDA outlook. But I think if you're looking at the change that happened in the third quarter, that's a very good indication for the direction that we're seeing headed into the fourth quarter if you want some framework. So again, I want you to decide how you want to, you know, prevent it to your your own essence.

Decline being more than that of the third quarter.

The decline on a sequential basis, where you're talking about absolute EBITDA dollars or were you talking about more of a percentage.

Okay.

Hey, Phil Thanks for the question.

On the fourth quarter outlook.

That's really more about the total EBITDA.

Outlook.

If you are.

If youre looking at the change that happened in the third quarter Thats, a very good indication for the direction that we're seeing headed into the fourth quarter. If you want some framework so.

Again.

What you should decide how you want to.

<unk> fit into your own estimates.

And then on on Gallatin.

Rex Quierty: And then on on Galatin, did you provide, I may have missed it, but did you provide any color on on the state of that project? Yeah, Phil, I'll ask Rex Quierty to give you an update on his group and she group. Yeah, Bill, thanks for the question. Currently, as we mentioned in our second quarter call, we are full run rate capable. With that said, during the third quarter, we continue to work on some of our automation issues, which have impacted our consistency.

Would you provide I may have missed it but did you provide any color on the state of that project.

Yes, Phil I'll ask <unk> to give you an update.

Part of this group and <unk> group.

Yes, Bill Thanks for the question.

Rex Quierty: But really, from a production standpoint, as we look at our entire group, we've gauged on what demand is in the marketplace. And that's really what we focused on. But again, just to reiterate, I mean, in Galatin, we're full run rate capacity at this point.

Currently as we mentioned in our <unk>.

Second quarter call.

Our full run rate capable.

Phil Gibbs: Thank you.

With that said during the third quarter, we continued to work on some of our automation issues, which have impacted our consistency.

But really from a production standpoint.

As we look at our entire group, we've gauged on what demand is in the marketplace and Thats really what we focused on.

But again just to reiterate I mean, a gallon to more full run rate capacity at this point.

Thank you and then lastly for me is on the new announcement on the <unk>.

Phil Gibbs: And then lastly for me is on the new announcement on the northwest with the rebar micro mill. Yes, really what what drove that decision? And, you know, I guess what are the expectations for one that that could be that could be contributing? Yeah, Phil, you know, again, it was an announcement that we're going to work through and John Hollatin is team are going to work through and look at the diligence and all the variables that go into bringing that project to fruition.

In the northwest.

With the rebar micro mill.

I guess really what.

What drove.

That decision.

And.

I guess what are the expectations for one that could be that could be contributing.

Okay.

Yes, so again it was an announcement that.

We're going to work through and John Howard and his teams are going to work through and look at the diligence and all the variables that go into <unk>.

That project to fruition, but the drivers of that I think John touched on really well that mill has been around since $19 five and as that city has grown up.

Phil Gibbs: But, you know, the drivers of that, I think John touched on really well. That mill has been around since 1905 and is that city has grown up expanding that footprint becomes a significant challenge. So, how do we do that? How do we continue to serve our customers? How do we continue to serve those markets and gaining new customers? And again, we see some opportunities out there that are compelling that we think the strategies that the team is engaged on are going to potentially effectuate a great long term outcome. Again, Seattle has been an incredible producer for Newport for customer shareholders. And so again, against that backdrop of providing the most capability for our customers are really the drivers behind this exploration in our future.

Expanding that footprint becomes a significant challenge.

How do we do that how do we continue to serve our customers. How do we continue to serve those markets and gaining new customers and again, we see some opportunities out there that.

Our compelling that we think the strategies that the team is engaged on are going to.

Essentially effectuate a great long term outcome again, Seattle has been an incredible producer for Nucor for our customers shareholders and so again against that backdrop of providing the most capability for our customers are really the drivers behind this exploration in our future.

Thanks, Glenn I had I had one further.

Leon Topalian: Thanks, Leon. I had one further, and I apologize, but it's just popped in my mind here. What's the current appetite for Ramin A across the spectrum? Whether that's in mills or fab or recycling? I know you've obviously made a lot of internal investments, so you can be more in control of kind of the long-term asset quality and cost-based of what you're investing in, but what's the appetite to add on that capability with M&A and how willing are you need the potential targets you're looking at?

Apologize, but it just popped in my mind here.

What's the current appetite.

For for M&A across the spectrum, whether thats in.

Mills or fab.

Or.

Recycling I know, you've obviously made a lot of internal investments.

So you can be more in control of kind of a long term asset quality and cost base of what you're investing in but what's what.

What's the appetite to.

To add on capability with M&A and how willing are.

Any of the potential targets you're looking at thanks.

Yes, Phil what I would tell you as well.

Leon Topalian: Thanks. You know, so what I would tell you is we've generated an awful lot of free cash flow. We've got a lot of cash. We've got the best credit rating in the industry. So, you know, all those things said there's no desperation. There hasn't been. There wasn't a 21 and 22 and the record years of Nucor, it was incredibly disciplined approach to think about growth, but make no mistake. We're going to grow.

We generated an awful lot of free cash flow, we've got a lot of cash we've got the best crew.

Leon Topalian: We're going to invest. We're going to continue to maximize our shareholder returns. We're going to continue to be great stewards of the shareholder capital we're entrusted with. We're going to return our 40%. We're going to maintain an incredibly strong credit rating, but we're going to invest further in the future. We're going to look at, so I would tell you, the appetite is continually strong. Again, a very disciplined mindset that this cash isn't burning a hole in our pocket.

Rating in the industry show.

All of those things said Theres no desperation, there hasnt been there wasn't in 'twenty, one and 'twenty two and the record years of Nucor. It was an incredibly disciplined approach to think about growth, but make no mistake, we're going to grow we're going to invest we're going to continue to maximize our shareholder returns we're going to continue to be great stewards of the shareholder <unk>.

Capital are interested with we're going to return our 40% we're going to maintain an incredibly strong credit rating, but.

We're going to invest for the future. We're look at show I would tell you. The appetite is continually strong with a again a very disciplined mindset that this cash isn't burning a hole in our pocket, we're not going to.

Leon Topalian: We're not going to, you know, chase things. We're going to look for the things that create EVA for our shareholders period full stop. Again, under the umbrella of the cultural fit that matches Nucor's longstanding traditions of how we know we can maximize that return is through the team through the incredible culture that Nucor has been a proud part of for 60 years. That is driving and guiding our decisions and how we think about those companies that we choose to engage and bring on to Nucor.

Chase things, we're going to look for the things that create EMEA for our shareholders period full stop.

Phil Gibbs: Thanks, Phil.

Again under the umbrella of the.

Cultural fit that matches nucor's longstanding tradition of how we know we can maximize.

That return is through the team through the incredible culture that Nucor has been a proud part of for 60 years that is driving and guiding our decisions and how we think about those companies that we choose to engage and bring on a new core.

Okay.

Thanks, Phil.

Timna Tanners: The next question is from Kimner Tanners of Wolfly Search. Please go ahead.

The next question is from Timna Tanners of Wolfe Research. Please go ahead.

Leon Topalian: Hey, good morning, everyone. I wanted to fill up on Phil's question and see if I could ask it a little differently, but on a call we were just on the most of us. We heard that there's a view of one of the other steel mills that there could be further consolidation in the flat road sector. So do you agree that you've been making your investments to grow organically in a lot of ways?

Hey, good morning, everyone.

Wanted to follow up on Phil's question, and see if I could ask it a little differently, but on that call. We are just on most of our Sam we heard that there is a view of one of the other steel mills that there could be further consolidation in the flat rolled sector. So.

Do you agree that there is further you've been making investments to grow organically and a lot of ways, but do you think there's also ability to further consolidate without running into any issues on antitrust.

Leon Topalian: But do you think there's also ability to further consolidate without running into any issues and antitrust? Yeah, look, I think like you, we're watching that play out as well and so we'll see how that shakes out in the coming weeks and months and in years. But again, what I can not speculate on is some of that. What I can tell you for sure is our strategy is clear and how we want to think about growing this company and investing for our futures.

Yes look.

Tim I think like you, we're watching that play out as well and so we'll see how that shakes out in the coming weeks and months and years, but.

Again, what I would.

Not speculate on is some of that what I can tell you for sure is our strategy is clear and how we want to think about growing this company and investing for our future. So.

Leon Topalian: So, you know, historically what we've seen is the industry is consolidated. That's been a healthy thing for the steel industry. It's been a good outcome. And so, you know, whether or not certain companies meet DOJ hurdles, I can't even begin to speculate on, but again, like you were watching how this plays out and we'll see too. Okay, so let me switch gears a little bit and kind of ask, on the flat road side, you've been ramping up Gallatin and Brandeburg for a while, but it doesn't seem like you're running flat road anywhere near full out, if we look at the sheet volumes, they're down quarter to quarter despite Gallatin ramping up.

Historically, what we've seen is the industry has consolidated thats been a healthy thing for the steel industry, it's been a good outcome and so.

Whether or not certain companies meet Doj hurdles I can't even begin to speculate on but.

Again like you were watching how this plays out and we'll stay tuned.

Okay. So let me switch gears, a little bit and kind of ask on that.

Flat rolled side.

<unk> been ramping up galton in Brandenburg for awhile, but not it doesn't seem like you're running flat rolled anywhere near full out if we look at the heat volumes they were down quarter over quarter. Despite gallatin ramping up. So you are running your seat at less than full utilization, but youre also starting a new sheet mill is that going to displace any capacity or are you.

Leon Topalian: So you're running your sheet at less than full utilization, but you're also starting a new sheet mill. Is that going to displace any capacity, or are you thinking that will be incremental? Because I know on the rebar side, you've been pretty disciplined in not adding a lot of extra capacity, but it's thought rolled a different market for a reason that I might be missing. Do we great to get your thoughts on that, thanks.

And that will be incremental because I know on the rebar side, you've been pretty disciplined in not adding a lot of extra capacity.

It's a different market for a reason that I might be missing would be great to get your thoughts on that thanks.

Rex Quierty: Yeah, I'll share a couple of perspectives. The first thing though I want to do is decouple Gallatin and Brandeburg. Brandeburg's not been in the start-up for a while. They are on target. They completed that project on schedule, on time, and on budget, with one of the highest safety outcomes we've ever seen in the history of New Corps. So I couldn't be more proud of how they've executed that and how the play group is going to market.

I'll share a couple of perspectives first thing, though I want to do is decoupled.

And Brandenburg Brandenburg has not been in the startup for a while they are on target.

Did that project on schedule on time and on budget with one of the highest safety.

Safety.

Outcomes, we've ever seen in the history of Nucor, So I couldn't be more proud of how they've executed that and how the play group is going to market. So I would tell you that is very different from what we've seen in galaxy, where again I am not sure all of our.

Rex Quierty: So I would tell you that's very different from what we've seen in Gallatin, where, again, I'm not sure all of our, you know, obviously you've been into a number of New Corps facilities. When you look in the visits I've made to Gallatin and what they had to do, the integration of, you know, we call it a brown field, but they essentially were a green field and everything from automation in the control systems that are required to bring that new equipment online was percoliant.

Obviously, you've been through a number of Newport facilities. When you look in the visits I've made the galaxy and what they have to do the integration of <unk>.

We call it a brownfield, but they essentially were a greenfield it everything from automation in the control systems that are required to bring that new equipment online was herculean. The team has worked entire.

Rex Quierty: The team has worked incredibly well, safely, but there were a lot of start-up issues that cost us six to eight months of where we thought we were going to be. Your ultimate question of, you know, are we going to pay the utilization rates to the outcomes? The answer is no. Now, we're going to look in making sure that the towns that we bring into the market are balanced. We're not just going to run, you know, one inch plate at brain and bird because they can when heard from or Tuscaloosa can do something already make those towns and ensure that customer need, but picture out any other additional comments you'd like to make.

Credibly well safely, but there are a lot of startup issues yet.

Cost of six to eight months of where we thought we were going to be.

Your ultimate question of.

Are we going to peg the utilization rates to the outcomes. The answer is no we're going to look at making sure that we bring into the market are balanced we're not just going to run.

One inch plate at Brandenburg, because they can win Hereford Tuscaloosa can do something.

Or do you make those tons and serve that customer need, but Richard any other additional comments you'd like to make.

Rex Quierty: Tim, this is Rex Query. You know, as I look at our capabilities across our cheap notes, we're positioning ourselves to rationalize product based on some, I'm going to say the capability and the efficiency levels of our various plants. So, if you look at our pickle gallbline at Gallatin, which we have continued to support through all of these changes at Gallatin and supply into the automotive market, heavy frame applications, you look at our expansions in the coded side, the new gallbline announced for Berkeley, we tremendous automotive supply there from that plant.

Timna this fresh query.

Look at our capabilities across our sheet mills.

And we're positioning ourselves.

To rationalize product based offering.

I'm going to say the capability and the efficiency levels of our various plants. So if you look at our Pickle Gal line.

Gallatin, which we have continued to support through all of these changes at Gallatin and supply into the automotive.

Market heavy frame applications. If you look at our expansions in the coated side, new galvo on announced for Berkley tremendous automotive supply.

From that plant. So we are going to expand the capabilities. There are investments in crawfordsville. So we'll really look to make sure.

Rex Quierty: So, we're going to expand capabilities there at our investments to the profits bill. So, we really want to make sure that we're expanding capabilities value added. You know, we're growing in our capabilities with our customers, not just only in volume, but we're going to focus on market and bottom line profitability. Frankly, that's going to be our focus.

We're expanding capabilities value added.

We're growing in our.

Our capabilities with our customers not just only in volume, but we're hopeful.

On margin and Bottomline profitability, frankly, that's going to be our focus.

Okay. I was just trying to get an answer to the question on the seat miles are they going to be. The addition on west Virginia sheet mill will that be incremental capacity or like you are alluding to on the rebar side couldn't replace existing capacity and if it's incremental is there room for another 3 million tons in the market.

Leon Topalian: Okay, I would just kind of get an answer to the question on the sheetmills. Are they going to be the additional West Virginia sheetmills? Will that be incremental capacity or like you are alluding to on the rebar side, could it replace existing capacity? And if it's incremental, is there room for another 3 million tons in the market? Yeah, well, I think that's a fair question and it's going to be both. This is the short answer.

Yes look I think that's a fair question and it's going to be both is the short answer.

Leon Topalian: You know, part of the driver for that is we think about the sustainability model and where our customer segment is asking us to go and has been asking us to go, that's going to be an incredible need and don't forget that that middle is going to sit in the largest sheet consuming region in the United States where Nucor is under serve. We don't have as much market share that we know we're going to be able to go in and provide for our customers.

Part of the driver for that as we think about the sustainability model and where are our customer segment is asking us to go and has been asking us to go that's going to be incredible need and don't forget that that mill is going to sit in the largest sheet consuming region in the United States, where nucor is underserved we don't have as much.

Market share that we know we're going to be able to go in and provide for our customers. So there is no doubt that.

Leon Topalian: So there's no doubt that, you know, both, both pieces of that strategy are going to come to play in the coming years as we ramped that up. And so, you know, no, we're not building 3 million tons of capacity that we think we're going to run in 2.1. We have full expectations that we're going to build it in 3 and it's going to run in 3. Okay. Thank you. What you just said, the incremental in new capacity. Thanks Ian.

Bowl both pieces of that strategy is going to come to play.

In the coming years, as we ramp that up and so.

No. We're not building 3 million tons of capacity that we think we're going to run it to what we have full expectations that we're going to build into three and it's going to run at three.

Okay. Thank you.

What you just said the incrementally in new capacity.

Got it thanks again.

Leon Topalian: This concludes our question and answer session. I would like to turn the conference back over to Leon Capallan for closing remarks. In closing, I'd like to thank our new core team members for the way you've executed our growth strategy and continue to raise a bar on the North Safety. Let's carry this performance through and finish the rest of this year and make this the fifth straight year of record performance. I'd like to also thank our customers for the trust you place in us with each and every order.

This concludes our question and answer session I would like to turn the conference back over to Leon Topalian for closing remarks.

In closing I'd like to thank our Nucor team members for the way you've executed our growth strategy and continue to raise the bar on our safety.

Let's carrying this performance through and finish the rest of this year and make this the fifth straight year of record performance I'd like to also thank our customers for the trust you've placed in us with each and every order and finally, thank you to our shareholders in the trust you place in us to be great stewards of the capital.

Leon Topalian: And finally, thank you to our shareholders in the trust you place in us to be great stewards of the capital. Thank you all for your interest in Nucor and have a great day. The conference is now concluded.

You all for your interest in Nucor and have a great day.

The conference has now concluded. Thank you for attending today's presentation you may now disconnect.

Speaker: Thank you for attending today's presentation.

Speaker: You may now.