Q2 2024 Nucor Corp Earnings Call

Jack Sullivan: during the call. Today's discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of security. The actual results may be different from Ford's looking statements and involve risks outlined in our Safe Harbor Statement and disclosed in Nucor's SEC file. The appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures. So with that, I'm going to turn the call over to Leon. Thanks, Jack, and welcome, everyone. I'd like to begin by highlighting two recent changes to our executive team. In June, Doug Jellison retired after 33 years with Nucor.

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

Speaker Change: Actual results may be different than forward looking statements and involve risks outlined in our safe Harbor statement and disclosed in Nucor's SEC filings.

The appendix of today's presentation includes supplemental information and disclosures along with a reconciliation of non-GAAP financial measures so with that in the call over to Leon.

Leon J. Topalian: Doug worked across many of our businesses and made tremendous contributions to Nucor over the three decades he was part of our team, most recently as EVP for Strategy. We wish Doug, Luana, and his entire family the very best in retirement. And in May, Randy Spicer was promoted to Executive Vice President to run our bar and engineered bar businesses. Randy is a talented leader who has most recently served as President of Nucor Tubular Products.

Leon: Thanks, Jack and welcome everyone I would like to begin by highlighting two recent changes to our executive team in June Doug Jellison retired after 33 years with Nucor.

Speaker Change: Doug worked across many of our businesses and made tremendous contributions to nucor over the three decades. He was part of our team. Most recently as EVP for strategy, we wish Doug <unk> and his entire family the very best in retirement.

Speaker Change: And in May Randy Spicer was promoted to executive Vice President to run our bar and engineered bar businesses. Randy is a talented leader who has most recently served as president of Nucor tubular products. He has been with Nucor now for more than 20 years and we're excited to have them part of our executive team.

Leon J. Topalian: He's been with Nucor now for more than 20 years, and we are excited to have him as part of our executive team. Turning to our second quarter performance, I'd like to congratulate our entire team on achieving the safest first half of any year in Nucor's history, with 52 of our 109 divisions accomplishing our ultimate goal of zero recordable injuries. These are fantastic results, and I'd like to thank our 32,000 team members for your steady progress toward making Nucor the world's safest steel company.

Speaker Change: Turning to our second quarter performance I'd like to congratulate our entire team on achieving the safest first half of any year in nucor's history.

Speaker Change: With 50 to over 109 divisions accomplishing our ultimate goal of zero recordable injuries.

Speaker Change: These are fantastic results and I'd like to thank our 32000 team members for your steady progress towards making Nucor. The worlds safest steel company in terms of financial results. We generated earnings of $2 68 per diluted share in the second quarter, bringing our year to date earnings to six.

Leon J. Topalian: In terms of financial results, we generated earnings of $2.68 per diluted share in the second quarter, bringing our year-to-date earnings to $6.14 per diluted share. Second quarter earnings decreased compared to the first quarter primarily due to lower average selling prices in both our steel mills and steel product segments. Returning capital to shareholders and maintaining a strong balance sheet are key components of our overall capital allocation philosophy, and we made progress on both fronts during the quarter. Nucor repurchased approximately 2.9 million shares for $500 million, and Moody changed its outlook on Nucor's senior unsecured credit rating from stable to positive.

Speaker Change: Dollars 14 per.

Speaker Change: Per diluted share.

Speaker Change: Second quarter earnings decreased compared to the first quarter, primarily due to lower average selling prices in both our steel mills and steel product segments.

Speaker Change: Returning capital to shareholders and maintaining a strong balance sheet are key components of our overall capital allocation philosophy, and we made progress on both fronts during the quarter Nucor repurchased approximately two 9 million shares for $500 million.

Speaker Change: And Moody's changed its outlook on Nucor's senior unsecured credit rating from stable to positive.

Leon J. Topalian: One thing I'm especially proud of is the progress our team continues to make in advancing our long-term value-creating strategy. During the quarter, we continued to make progress in growing our core steelmaking operations while expanding into new downstream businesses. I'd like to just take a minute and highlight a few of these initiatives. At our Lexington, North Carolina, Greenfield Bar Mill, we hit key milestones during the quarter and remain on track to commission the mill in the first quarter of 2025.

Speaker Change: One thing I'm, especially proud of is the progress our team continues to make in advancing our long term value creating strategy during the quarter. We continue to make progress in growing our core steelmaking operations, while expanding into new downstream businesses I'd like to just take a minute and highlight a few of these initiatives.

Speaker Change: At our Lexington, North Carolina, Greenfield Bar Mill, we hit key milestones during the quarter and remain on track to commission the mill in the first quarter of 2025.

Leon J. Topalian: At our West Virginia Sheed Mill, we've made considerable progress since our groundbreaking last fall and expect construction to wrap up by the end of 2026. As for recently completed projects, we continue to build momentum in production and shipments out of our Gallatin and Brandenburg mills. Gallatin shipped almost 500,000 tons for the quarter, establishing new daily and ship production records.

Speaker Change: At our West Virginia sheet Mill, we've made considerable progress sensor groundbreaking last fall and expect construction to wrap up by the end of 2026.

Speaker Change: As for our recently completed projects, we continue to build momentum in production and shipments out of our Gallatin and Brandenburg Mills Gallatin shipped almost 500000 tons for the quarter, establishing new daily and ship production Records and in late June we celebrated the grand opening of its new tube mill.

Leon J. Topalian: And in late June, we celebrated the grand opening of its new tube mill. At Brandenburg, we ship nearly 60,000 tons in Q2, but we no longer expect to ship half a million tons for the year due to softer market conditions, elevated plate imports, and our focus on capabilities rather than volume. However, we will continue to focus on achieving full run rate capabilities and becoming EBITDA positive by year's end. We also took additional steps to expand the set of solutions we offer customers, recently announcing two acquisitions as part of our Expand Beyond strategy.

Speaker Change: At Brandenburg, we shipped nearly 60000 tonnes in Q2, but we no longer expect to ship half a million tons for the year due to softer market conditions elevated plate imports and our focus on capabilities rather than volume tower.

Speaker Change: However, we will continue to focus on achieving full run rate capabilities, and becoming EBITDA positive by year's end.

Speaker Change: We also took additional steps to expand the set of solutions, we offer customers recently announcing two acquisitions as part of our expand beyond strategy. As a reminder, this strategy involves targeting steel adjacent businesses.

Leon J. Topalian: As a reminder, this strategy involves targeting steel-related businesses with attractive growth profiles, high margins, and compelling synergy potential. In June, we announced the planned acquisition of Ritech, a leading manufacturer of high-performance overhead doors. In conjunction with this acquisition, we're forming Nucor Door Technologies, our overhead door growth platform, which will include CHI overhead doors as well as Ritech. Ritech has two manufacturing facilities in Wisconsin that produce high-performance doors for warehouses, auto dealerships, advanced manufacturing facilities, and cold storage.

Speaker Change: With attractive growth profiles high margins and compelling synergy potential.

Leon J. Topalian: The company has a strong reputation for quality products and superior customer service. The combination of Ritech and CHI to form Nucor Door Technologies allows us to offer customers a diverse portfolio of residential and commercial doors. The acquisition is expected to close by the end of July, and we're excited to welcome Ritech's 300 team members to the Nucor family. Earlier in the second quarter, we closed on the acquisition of Southwest Data Products, a manufacturer and installer of data center infrastructure.

Speaker Change: In June we announced the planned acquisition of <unk>, a leading manufacturer of high performance overhead doors in conjunction with this acquisition, we're forming new core door technologies, our overhead door growth platform, which will include CH I overhead doors as well as where eyetech.

Speaker Change: <unk> has two manufacturing facilities in Wisconsin that produce high performance doors for warehouse auto dealerships advanced manufacturing facilities and cold storage.

Speaker Change: The company has a strong reputation for quality products and superior customer service.

Speaker Change: The combination of her itek and CACI to form New corridor technologies allows us to offer customers a diverse portfolio of residential and commercial doors.

Speaker Change: The acquisition is expected to close by the end of July and we're excited to welcome <unk> 300 team members to the Nucor family.

Speaker Change: Earlier in the second quarter, we closed on the acquisition of southwest data products manufacturer and installer of datacenter infrastructure.

Leon J. Topalian: This acquisition gives us expanded capabilities to serve a rapidly growing market driven by the rise of artificial intelligence and cloud computing. By combining the capabilities of Southwest Data Products, Nucor Warehouse Systems, and Nucor Buildings Group, we can now provide customers with nearly all steel products that go into a data center, from the building to the interior infrastructure. We believe the cross-selling opportunities that Ritech and Southwest Data Products will create with existing Nucor business units will create meaningful value for our customers and our shareholders.

Speaker Change: This acquisition gives us expanded capabilities to serve a rapidly growing market.

Speaker Change: Driven by the rise of artificial intelligence and cloud computing.

Speaker Change: By combining the capabilities of southwest data products Nucor warehouse systems, and Nucor buildings group, we can now provide customers with nearly all steel products that go into a data center from the building to the interior infrastructure.

Speaker Change: We believe the cross selling opportunities that <unk> and southwest data products create with existing Nucor business units will create meaningful value for our customers and our shareholders.

Leon J. Topalian: Now, I'd like to take a minute to revisit our long-term growth plan and how the investments we're making today can create value for our customers and shareholders for years to come. For raw materials, we're investing in new technologies to enhance our scrap segregation and recovery rates while reducing our carbon footprint. In our steel mill segment, each investment is aligned with our broader strategy to increase Nucor's product mix towards higher-margin, value-added products to address specific customer needs in key markets. For steel products, we're investing in automation to drive efficiencies and create a safer work environment.

Speaker Change: Now I'd like to take a minute to revisit our long term growth plan and how the investments we're making today can create value for our customers and shareholders for years to come.

Speaker Change: And raw materials, we're investing in new technologies to enhance our scrap segregation and recovery rates, while reducing our carbon footprint and.

Speaker Change: In our steel Mills segment, each investment is aligned with our broader strategy to increase nucor's product mix towards higher margin value added products to address specific customer needs in key markets.

Speaker Change: For steel products, we're investing in automation to drive efficiencies and create a safer work environment.

Speaker Change: And we're innovating new products and production methods that our customers value.

Speaker Change: And finally, we're investing in new downstream platforms, where we identify steel adjacent businesses underpinned by strong secular growth trends.

Leon J. Topalian: And we're innovating new products and production methods that our customers value. And finally, we're investing in new downstream platforms where we identify steel-related businesses underpinned by strong secular growth trends. Nucor embarked on this long-term growth strategy in 2020 when I became CEO. Over the past several years, we've accomplished a lot, but we've still got plenty left to do. The next two years will likely be our most capital intensive, with several active construction projects occurring simultaneously. We plan to fund this with operating cash flow and cash on hand, which was approximately $5.4 billion at the end of Q2.

Leon J. Topalian: Nucor embarked on this long term growth strategy in 2020, when I became CEO over the past several years, we've accomplished a lot, but we've still got plenty left to do the next two years will likely be our most capital intensive with several active construction projects occurring simultaneously.

Leon J. Topalian: We plan to fund this with operating cash flow and cash on hand, which was approximately $5 4 billion.

Leon J. Topalian: At the end of Q2.

Leon J. Topalian: Our largest current project is the West Virginia Sheet Mill, which will begin supplying customers in the Midwest and Northeast with a more sustainable sheet product once construction is completed in late 2026. Between now and then, we're excited about the startup of several other projects. In the first quarter of 2025, we'll begin ramping up our new Rebar Micro Mill in Lexington, North Carolina, to supply construction markets in the Southeast and Mid-Atlantic regions.

Leon J. Topalian: Our largest current project is the West Virginia Street Mill, which will begin supplying customers in the Midwest and northeast with a more sustainable sheet product. Once construction is completed in late 2026.

Leon J. Topalian: Between now and then we're excited about the startups of several other projects.

Leon J. Topalian: In the first quarter of 2025, we will begin ramping up our new rebar micro mill in Lexington, North Carolina to supply construction markets in the southeast and mid Atlantic regions.

Leon J. Topalian: In the spring and fall of 25, we'll complete construction of two highly automated utility tower manufacturing plants to serve the high-growth power transmission and telecommunications markets. After that, we'll be bringing on new finishing capabilities, including a new galvine and coating complex at Crawfordsville in late 25, and a second galvine at Nucor Berkeley in mid-26. Each of these projects, along with several others throughout the company, serve important roles. It's not about adding capacity.

Leon J. Topalian: In the spring and fall of 'twenty five we'll complete construction of two highly automated utility tower manufacturing plants to serve the high growth power transmission and telecommunications markets.

Leon J. Topalian: After that we'll be bringing on new finishing capabilities, including a new galvanizing coding complex at Crawfordsville in late 'twenty, five and a second galvan at Nucor, Berkeley in mid 'twenty six.

Leon J. Topalian: Each of these projects along with several others throughout the company serve important roles.

Leon J. Topalian: It's about a differentiated capability set for our customers while doubling the through-cycle earnings potential for Nucor. We have crossed the midpoint of our multi-year CapEx plan, but several recently completed projects have yet to reach their full earnings potential. We know what it takes to accomplish the goals we laid out for you at our Investor Day nearly two years ago, and our leadership team is laser focused on the execution required to get us there.

Leon J. Topalian: Not about adding capacity, it's about a differentiated capability set for our customers, while doubling the through cycle earnings potential for Nucor.

Leon J. Topalian: We have crossed the midpoint over a multi year capex plan, but several recently completed projects have yet to reach their full earnings potential.

Leon J. Topalian: We know what it takes to accomplish the goals we've laid out for you at our Investor day, nearly two years ago.

Leon J. Topalian: Our leadership team is laser focused on the execution required to get US. There finally, I'd like to address concerns the domestic steel industry has regarding unfair trade practices over the last 18 months, we've seen a material uptick in steel imported from Mexico, and Canada to levels far above.

Leon J. Topalian: Finally, I'd like to address concerns the domestic steel industry has regarding unfair trade practices. Over the last 18 months, we've seen a material uptick in steel imported from Mexico and Canada to levels far above historic levels, contrary to the Section 232 agreements with both countries. It's also clear that China and other countries have been evading Section 232 tariffs and other duties by transshipping steel through our neighbors to the north and south.

Leon J. Topalian: Historic levels, contrary to the section 232 agreements with both countries. It's also clear that China and other countries have been evading the section 203 to tariffs and other duties by trained shipping steel through our neighbors to the north and south.

Leon J. Topalian: Fortunately, a few weeks ago, trade representatives from the U.S. and Mexico announced an agreement designed to stop the flow of illegally imported steel from China and elsewhere. Under this new agreement, the U.S. will impose a 25% tariff on Mexican steel that is melted and poured outside of North America, and Mexico agreed to raise its tariff rates on imports from countries it does not have free trade agreements with. In our view, this was an important first step to stop the surge of steel imports from Mexico and address the problem of circumvention. However, more stringent efforts are needed, and any exceptions to this new requirement, including through the exclusion process, will largely negate the benefits of the agreement.

Leon J. Topalian: Fortunately a few weeks ago trade representatives from the U S and Mexico announced an agreement designed to stop the flow of illegally imported steel from China and elsewhere.

Leon J. Topalian: Under this new agreement the U S will impose a 25% tariff on Mexican steel that has melted and poured outside of North America, and Mexico agreed to raise its tariff rates on imports from countries. It does not have free trade agreements with.

Speaker Change: In our view this was an important first step to stop the surge of steel imports from Mexico and address the problem of circumvention. However, more stringent efforts are needed in any exceptions to this new requirement, including through the exclusion process will largely negate the benefits of the agreement.

Leon J. Topalian: And we still have concerns about trade practices involving rebar, electrical conduit, and the rise in fabricated steel products coming in from Mexico. We urge the U.S. government to continue working with Mexican leaders to address each of these issues. We also urge Congress to pass the Level of Playing Field Act 2.0.

Speaker Change: And we still have concerns about trade practices involving rebar electrical conduit and the horizon fabricated steel products coming in from Mexico.

Speaker Change: We urge the U S government to continue working with Mexican leaders to address each of these issues.

Speaker Change: We also urge Congress to pass the level, the playing field act to point out.

Steve: This legislation includes critical updates to the U.S. trade remedy laws that would enhance the domestic industry's ability to defend against unfairly traded imports, with new tools to address Chinese cross-border subsidies and expedite investigations of repeat offenders that simply move production from one country to another. We appreciate the bipartisan support that exists for strong trade enforcement. With that, I'll turn it over to Steve, who will share additional details on our Q2 financial results. Thanks, Steve.

Speaker Change: This legislation includes critical updates.

Speaker Change: The U S trade remedy laws that would enhance domestic industry's ability to defend against unfairly traded imports.

Speaker Change: With new tools to address Chinese cross border subsidies.

Speaker Change: And expedite investigations of repeat offenders that simply move production from one country to another.

Speaker Change: We appreciate the bipartisan support that exists for strong trade enforcement.

Speaker Change: With that I'll turn it over to Steve who will share additional details on our Q2 financial results Steve.

Steve: And thank you, Leon, and thank you to everyone for joining us on the call this morning. And during the first half of 2024, the team also executed on delivering results, posting strong earnings of just under a billion and a half dollars and around two billion dollars of cash from operations. During the second quarter, Nucor generated net earnings of $645 million, or $2.68 per share, approximately 23% lower than earnings from the first quarter of the year. The majority of our overall change in earnings between the prior quarter is attributable to our steel mill segment. This segment generated pre-tax earnings of $645 million, a decline of roughly 40% from the prior quarter.

Steve: Thank you Leon and thank you to everyone for joining us on the call. This morning.

Steve: Leon just highlighted how the nucor team is continuing to advance the ball on this long term and value creating strategy.

Steve: And during the first half of 2024. The team also executed on delivering results posting strong earnings of just under 1 billion $5 at around $2 billion of cash from operations.

Steve: During the second quarter Nucor generated net earnings of $645 million or $2 68 per share approximately 23% lower than earnings from the first quarter of the year.

Steve: The majority of our overall change in earnings between the prior quarter is attributable to our steel mill segment.

Steve: This segment generated pretax earnings of $645 million, a decline of roughly 40% from the prior quarter lower realized pricing, especially among our sheet Mills was the biggest single factor contributing to the segment reduced profitability.

Steve: Lower realized pricing, especially among our sheet mills, was the biggest single factor contributing to the segment's reduced profitability. The steel product segment delivered pre-tax earnings of $441 million for the second quarter, roughly 14% lower than the first quarter. Although segment shipments increased in the second quarter, lower realized pricing and decreased margins more than offset volume gains. Our steel product segment is composed of a diverse set of products and market solutions. And I'd like to highlight two of our groups that had more pronounced impacts on the segment results during the quarter. First, our tubular products group saw earnings decline by more than 50% during the quarter, as those divisions worked through higher-priced substrates in a declining price environment.

Steve: The steel products segment delivered pretax earnings of $441 million for the second quarter, roughly 14% lower than the first quarter.

Steve: Although segment shipments increased in the second quarter, lower realized pricing and decreased margins more than offset volume gains.

Steve: Our steel products segment is composed of a diverse set of products and market solutions and.

Steve: And I'd like to highlight two of our groups that had more pronounced impact on the segment results during the quarter.

Steve: First our tubular products group saw earnings declined by more than 50% during the quarter as those divisions worked through higher priced substrate in a declining price environment.

Steve: Our tubular products group accounts for more than one out of every five tons sold in the steel product segment. Another group to highlight in this segment is our joist and deck operation. These divisions continue to perform well, even as realized pricing for these products moderated from the record levels of prior years. Earnings from Joyston DEC declined roughly 5% from the prior quarter, but they still accounted for more than half of the segment earnings for the second quarter.

Steve: Our tubular products group accounts for more than one out of every five tons sold from the steel product segment.

Steve: Another group to highlight in this segment as our joist and deck operations.

Steve: These divisions continue to perform well even as realized pricing for these products moderated from the record levels of prior years.

Steve: Earnings from Joist and deck declined roughly 5% from the prior quarter, but still accounted for more than half of the segment earnings for the second quarter.

Steve: Our raw material segment produced pre-tax earnings of approximately $39 million for the quarter. Overall, volumes and pricing were softer than the prior quarter, but lower operating expenses more than offset these headwinds. During the second quarter, the power of Nucor's business model allowed it to generate a billion and a half dollars in cash from operations. This strong cash generation is a key factor enabling Nucor to continue its balanced, consistent, and long-term approach to allocating capital and creating value.

Steve: Our raw materials segment produced pretax earnings of approximately $39 million for the quarter.

Steve: Overall volumes and pricing were softer than the prior quarter, but lower operating expenses more than offset these headwinds.

Steve: During the second quarter, the power of Nucor's business model allowed us to generate 1 billion $5 in cash from operations. This.

Steve: This strong cash generation is a key factor, enabling nucor to continue its balanced consistent and long term approach to allocating capital and creating value.

Steve: Our capital allocation framework includes maintaining a strong investment-grade balance sheet, providing direct shareholder returns, and enabling growth in value through investment. That balanced and disciplined approach to capital allocation was on display again in the second quarter. Nucor's balance sheet has long been a foundational source of advantage and an enabler of our long-term strategy. At the end of the second quarter, our total leverage stood at less than 1.2 times trailing 12-month EBITDA, and our cash on hand was a healthy $5.4 billion.

Steve: Our capital allocation framework includes maintaining a strong investment grade balance sheet, providing direct shareholder returns and enabling growth and value through investments.

Steve: That balanced and disciplined approach to capital allocation was on display again in the second quarter.

Steve: Nucor's balance sheet has long been a foundational source of advantage and an enabler of our long term strategy.

At the end of the second quarter, our total leverage stood at less than 1.2 times trailing 12 month, EBITDA and our cash on hand was a healthy five $4 billion.

Steve: And as Leon mentioned earlier, we're pleased to see Moody's revise our Senior Unsecured Credit Outlook in May from Stable to Positive. The second quarter saw Nucor return just over $630 million to shareholders through dividends and share repurchase.

Steve: And as Leon mentioned earlier, we're pleased to see Moody's revised our senior unsecured credit outlook in may from stable to positive.

Leon J. Topalian: Second quarter saw Nucor returned just over $630 million back to shareholders through dividends and share repurchases.

Steve: These returns, when combined with the first quarter, yield direct shareholder returns of more than $1.7 billion year-to-date. While we target returning 40% or more of net earnings to shareholders, we've nearly tripled that rate on a year-to-date basis. And this demonstrates an important aspect of how Nucor thinks about managing shareholders' valuable capital. We either invest it to grow and create value, or we return it to shareholders. In addition to strong shareholder returns, during the quarter, we deployed more than $800 million in capital spending and more than $100 million in acquisitions.

Leon J. Topalian: These returns when combined with the first quarter.

Leon J. Topalian: Direct shareholder returns of more than $1 $7 billion year to date.

Leon J. Topalian: While we target returning 40% or more of net earnings to shareholders. We've nearly tripled that rate on a year to date basis.

Leon J. Topalian: And this demonstrates that an important aspect of how nucor thinks about managing shareholders valuable capital.

Leon J. Topalian: We either invest it to grow and create value or we return it to shareholders.

Leon J. Topalian: In addition to strong shareholder returns during the quarter, we deployed more than $800 million of capital spending and more than $100 million and acquisitions. These.

Steve: These investments, and those to come, will help fuel the future earnings capacity of this company. Turning to our third-quarter outlook, we expect consolidated earnings to be lower than the second quarter, primarily because of lower anticipated earnings from our steel mill segment. Earnings in the steel mill segment are expected to decline meaningfully as realized pricing has recently continued to decline across most of our major product categories. We also expect sequential earnings to decline in our steel products and raw materials segment. Taken together, the magnitude of the sequential decline in consolidated EBITDA for the third quarter could resemble that of our second quarter.

Leon J. Topalian: These investments and those to come will help fuel the future earnings capacity of this company.

Leon J. Topalian: Turning to our third quarter outlook, we expect consolidated earnings to be lower than the second quarter, primarily because of lower anticipated earnings from our steel Mills segment.

Leon J. Topalian: Earnings in the steel mill segment are expected to decline meaningfully as realized pricing as recently continue to decline across most of our major product categories.

Leon J. Topalian: We also expect sequential earnings to decline in our steel products and raw materials segments.

Leon J. Topalian: Taken together the magnitude of the sequential decline in consolidated EBITDA for the third quarter could resemble that of our second quarter.

Steve: Taking a step back to reflect on the broader macro picture, while the U.S. economy appears to continue to avert a more pronounced downturn, it's becoming more evident that activity has softened as the year has progressed. We've also seen an increase in imports year over year, and a higher-for-longer interest rate environment may have tempered or delayed some marginal demand. The confluence of these factors is driving margin pressure on several of our products in the near term.

Leon J. Topalian: Taking a step back to reflect on the broader macro picture.

Leon J. Topalian: While the U S economy appears to continue to avert a more pronounced downturn, it's becoming more evident that activity has softened as the year has progressed.

Leon J. Topalian: We've also seen an increase in imports year over year.

Leon J. Topalian: A higher for longer interest rate environment may have tempered or delayed some marginal demand.

Speaker Change: The confluence of these factors is driving margin pressure on several of our products in the near term.

Speaker Change: It's worth noting that there are several end markets that remain quite healthy, including construction activity related to semiconductors and other advanced manufacturing facilities data centers health care facilities and energy and infrastructure projects.

Nucor: As the largest and most diversified steel producer in North America, Nucor is well positioned to service each of these markets.

Steve: It's worth noting that there are several end markets that remain quite healthy, including construction activity related to semiconductors and other advanced manufacturing facilities, data centers, health care facilities, and energy and infrastructure projects. As the largest and most diversified steel producer in North America, Nucor is well positioned to serve each of these markets. With that said, we'd like to hear from you and answer any questions you might have. Operator, please open the line for questions.

Speaker Change: With that we'd like to hear from you and answering any questions you might have operator. Please open the line for questions.

Steve: Thank you. Ladies and gentlemen, we will now begin the question and answer session. Should you have a question, please press star followed by number one on your touchtone phone. You will hear a prompt that your hand has been raised. Should you wish to decline from the polling process, please press star followed by number two. If you are using a speakerphone, please lift the handset before pressing any key.

Speaker Change: Thank you ladies and gentlemen, we will now begin the question and answer session should you have a question. Please press star followed by number one on your Touchtone phone, you'll hear a prompt that's your hand has been raised.

Speaker Change: Should you wish to decline from the polling process. Please press star followed by number two.

Keith: Using a speaker phone please lift the handset before pressing any Keith one moment. Please for your first question.

Operator: One moment, please, for your first question. Your first question comes from the line of Bill Peterson from J.P. Morgan. Your line is now open. Please ask your question. Hi, Leon and Steve.

Speaker Change: Your first question comes from the line of Bill Peterson from Jpmorgan. Your line is now open. Please ask your question.

Bennett: This is Bennett on behalf of Bill. Given it's been about three and a half months since you first introduced your weekly CSP back in April, I was wondering if you could share any key takeaways you've received from customer feedback thus far? And furthermore, how has the strategy unfolded relative to your initial expectations? Yeah, Bennett.

Speaker Change: Hi, Liana, it's Steve This is Bennett on for Bill.

Steve Bennett: Given it's been about $3 five months since you first introduced your weekly TSP back in April I was wondering if you could share any key takeaways you've received from customer feedback thus far.

Steve Bennett: Furthermore, how is that strategy unfolded relative to your initial expectations.

Leon J. Topalian: I'll kick us off and... Noah, if you have any comments you'd like to add regarding the CSP and CHEAP. Look, first I would tell you we're excited about what we're seeing in the market. I think in a down market like we're seeing or a little softer market like we're seeing today, I think this is exactly where the long-term impact of CSP can be most meaningful to take out the speculation and speculative buying in the spot market and create a relevant, transparent published price.

Liana: Yes, Thanks Bennett.

Liana: So often.

Speaker Change: If you have any comments you'd like to add regarding the CSP unchanged.

Speaker Change: First I would tell you we're excited about what we're seeing in the market I think in a down market like we're seeing are a little softer market like we're seeing today I think this is exactly where the long term impact.

Speaker Change: It can be most meaningful to take out the speculation is speculative buying.

Speaker Change: In the spot market and create a relevant transparent published price and so.

Leon J. Topalian: So, again, I think it's going to take a little bit of time to work through a full cycle in the steel segment or the steel market, on the Sheets Steel CSP side of things, but again, we like what we're seeing. We're hearing a lot of positive feedback from our customers, and we believe it's helping us to solidify relationships with those customers whose demand is driven more by end-use market conditions and less by speculation. And so those are the customer relationships we value the most. And again, early days still, but again, we're liking what we're seeing. Yeah, Bennett, this is Noah.

Speaker Change: Again, I think that's going to take a little bit of time to work through a full cycle.

Speaker Change: In the steel segment or steel.

Speaker Change: She'd steal CSP side of things, but again, we like what we're seeing we're hearing a lot of positive feedback from our customers and we believe it is helping us to solidify relationships with those customers, whose demand is driven more by end use market conditions unless my speculation.

Speaker Change: And so those are the customer relationships we value the most.

Speaker Change: Again early days still but again, we're liking what we're seeing.

Noah: I just add that, as it's core to our culture, we've done what we said we were going to do with CSP; we believe we've provided relevant, timely pricing. And I think the market conditions over the last few months have afforded us the opportunity just to prove our transparency in pricing. I'll say that the feedback we get from customers is that our customers want to deploy their capital in a way that creates value for their customers, not in managing working capital or buying opportunistically.

Speaker Change: Yes, no I would just add as core to our culture. We've done what we said we were going to do with CSP. We believe we've provided relevant timely pricing and I think the market conditions over the last few months have afforded us the opportunity.

Speaker Change: To prove our transparency in pricing.

Speaker Change: I will say that the feedback we get from customers is our customers want to deploy their capital in a way that creates value for their customers.

Speaker Change: Not in managing working capital or buying Opportunistically. So we're going to continue to do what we've said we're going to do it.

Noah: So we're going to continue to do what we said we were going to do with CSP, remain relevant and timely with our pricing, and, you know, to your point about how we measure success in the future, we'll gauge success, and we'll be able to see success when we see order entry better matching underlying demand. So I think it's a longer-term engagement, but we're committed, and we're happy with our progress on CSP so far. Great, thanks. And if I could do one more,

Speaker Change: With CSP remain relevant and timely with our pricing.

To your point about how do we measure success in the future.

Speaker Change: We'll gauge success.

Speaker Change: We will be able to see success, when we see order entry better matching underlying demand.

Speaker Change: Longer term engagement are committed and we are happy with our progress so far.

Bennett: I think the color was clear on earnings for each segment and the comment relative to TT is helpful. But how should we think directionally about shipment for each segment looking into the third quarter? Sorry, shipments related to what minute?

Speaker Change: Great. Thanks, and if I could do one more I think the color was clear on earnings for each segment and the comment relative to Chi Chi is helpful. But how should we think directionally about shipments for each segment looking into the third quarter.

Bennett: I am sorry shipments related to what Bennett.

Leon J. Topalian: For the steel mill segment and the steel product segment, directionally, expectations into the third quarter. Yeah, look, you know, I think there's a lot of talk in the market about softer and are we heading for a cliff? And I would tell you, we don't feel that way at all.

Speaker Change: For the steel mill segment in the steel products segment directionally expectations into the third quarter.

Leon J. Topalian: Certainly, we've seen pricing move off historic highs of 21.2 and parts of three, but it's moderated, we think we've found some stability, and this market is stabilized, and most of our product groups, from a demand picture, the back half of the year, we expect it to be relatively flat. Again, if you look at the overall market for the year, the ADC is expected to drop about 1%.

Speaker Change: Yes look.

Speaker Change: I think there is a lot of talk in the market that software and are we heading for a clear fit.

Speaker Change: I would tell you we don't feel that way at all certainly we've seen pricing move off historic highs of 21, two and even parts of three.

Speaker Change: But it has moderated we think we've found.

Speaker Change: Sure.

Some stability in this market has stabilized in most of our product groups from a demand picture in the back half of the year, we expect it to be relatively flat again, if you will get the overall.

Speaker Change: Market for the year of the ADC is expected to drop about 1%. So again from a demand picture things are really not too bad and again many of our products remain incredibly.

Leon J. Topalian: So again, from a demand picture, things are really not too bad. And again, many of our products remain incredibly resilient. So, you know, specifically in the steel products sector, it's a very large sector for Nucor. It's not just buildings and joists and deck in our Volcraft facilities.

Speaker Change: Incredibly resilient, so specifically on the steel products sector again, it's a very large sector for nucor's not finished buildings.

Speaker Change: Joist and deck and in our forecast facilities, we've got.

Leon J. Topalian: We've got, you know, the fabricated rebar, we've got Skyline Steel, we've got our overhead door businesses and both CHI and Ritech now, and our data systems are racking. And so it's an incredibly diverse group that's consuming about 22% of our overall steel products. So it's an incredibly large business segment for us. But specifically in buildings and products, we're seeing some stable order entry rates coming in over the last, you know, few quarters. We've seen that very much stabilized.

Speaker Change: Sure.

The fabricated rebar, we've got skyline steel, we've got our overhead door businesses in both <unk> and <unk> now in our data systems are racking and so it's an incredibly diverse group.

Speaker Change: Assuming about 22% of our overall steel products into it.

Speaker Change: Credibly large business segment for us, but specifically in buildings and products we're seeing.

Speaker Change: Stable order entry rates and coming over the last few quarters, we've seen that very much stabilized and so we think the back half of the year.

Leon J. Topalian: And so we think the back half of the year, while we're working through some higher-priced inventory, we'll continue to tick up and, again, from a demand perspective, remain pretty resilient. Alright, thanks so much and best of luck.

Speaker Change: We're working through some higher priced inventory will continue to tick up and again from a demand picture remain pretty resilient.

Speaker Change: Alright, thanks, so much and best of luck.

Leon J. Topalian: Thank you. Appreciate it, bud. Your next question comes from the line of Martin Englert from Seaport Research Partner. Your line is now open. Hello, good morning, everyone.

Speaker Change: Thank you I appreciate it.

Martin John Englert: Can you provide an update on Nucor's armaterial strategy, specifically upgraded low-copper shred products and low-emission ironmaking? To the extent that it's applicable, maybe this is longer term, but if you could touch on the electrolysis process for iron ore in your investment in electrodes. Yeah, Martin, we'd love to address that. I'm going to ask Al Behr, who's taken over our raw materials group here in a second, to provide you with a more detailed update.

Speaker Change: Your next question comes from the line of Martin Englert from Seaport Research Partners. Your line is now open.

Martin John Englert: Hello, Good morning, everyone.

Martin John Englert: Can you provide an update on nucor's raw materials strategy.

Speaker Change: Typically upgraded low copper shred products.

Speaker Change: Mission Iron.

Speaker Change: To the extent that it's applicable maybe this is longer term, but if you could touch on electrolysis process for iron ore and your investment in electric.

Speaker Change: Yes Martin.

Allen C. Behr: We'd love to address that I want to ask al Behr taken.

Taken overall raw materials group here in a second too to provide you a more detailed update but I would tell you broadly for the last 25 years Nucor has taken a very very deliberate focus on controlling our raw material inputs across the spectrum over the last.

Martin John Englert: But I would tell you broadly, for the last 25 years, Nucor has taken a very, very deliberate focus on controlling our raw material inputs across the spectrum. Over the last decade, decade and a half, we've been really focused on how do we control more of that? How do we give ourselves the flexibility and optionality to be able to do that for the long term?

Allen C. Behr: Hey, decade, and a half we've been really focused on how do we control more of that how do we give ourselves the flexibility and optionality to be able to do that.

Leon J. Topalian: But Al, if you would maybe share some of the things that we're working on, some of the projects that are already completed, and where we're headed. Sure, Leon, and thank you, Martin, for the question. You asked just about our raw material strategy. I'd summarize it this way and say that what we're aiming to do is create competitive advantage by supplying our mills with the most cost-effective stream of inputs and doing that while minimizing the embodied carbon in our finished products. And so that's our guiding light.

The long term, but.

Maybe share some of the things that we're working on some of the projects that are already completed and where we're headed.

Speaker Change: Thank you Martin for the question that you asked just about our raw material strategy I'd summarize it this way and say that what.

Speaker Change: What we are aiming to do is create competitive advantage by supplying our mills with the most cost effective stream of inputs and to do that while minimizing the embodied carbon and our finished products and so that's our guiding light and under that then we execute that by building flexibility and adaptability into our raw material stream and we've talked about that for a number of years.

Allen C. Behr: And under that, then we execute that by building flexibility and adaptability into our raw material stream. And we've talked about that for a number of years and have had the opportunity to demonstrate that through changes in the market, excuse me, in the market that we see. So one of those that gives us flexibility is the low copper shred. And I know you asked about that.

Speaker Change: And I've had the opportunity to demonstrate that through changes in the Mark excuse me in the market that we that we see.

Speaker Change: One of those that gives us flexibility as low copper shred and I know you asked about that and I'll share a few thoughts just on how we are.

Allen C. Behr: And I'll share a few thoughts just on how we're attacking that area and what we think of it. And the first thing I'd share with you, Martin, is that low copper shred isn't new for us; we've been making that product for about 12 years at two different locations. And so we've mastered the discipline of how to make it. And we've mastered the discipline of how to use it in the mix.

Speaker Change: In that area and how we think of it in the first thing I'd share with you Martin does that low copper shred isn't new for us that we've been making that product for about 12 years at two different locations and so we've mastered the discipline of how to make it we've mastered the discipline of how to use it in the mix, but you have seen recently a renewed investment in some newer investments in low copper shred as we see.

Allen C. Behr: But you have seen recently a renewed investment and some newer investments in low copper shred as we see the demand for high quality metallics going up. And we're responding to that by making additional investments in low copper shred to add to the flexibility that's so key to our strategy. And so in terms of where we sit today, I'd share with you that we can process today about 1.4 million tons of low copper shred, and we're bringing on another 750,000 tons as we speak. So that'll give us, in the very near future, about 2.1 million tons of capacity.

Speaker Change: And the demand for high quality metallics going up.

Speaker Change: And we're responding to that by making additional investments in low copper shred. The added flexibility that's so key to our strategy.

Allen C. Behr: And then, as we look out another couple of years, I'd expect us to add another three and a half to 4 million tons of additional capacity, landing us somewhere in the five and a half to 6 million ton range for low copper shred. But Martin, I'll share with you, you know, if you think about the 4 million tons of DRI that we also make, and you add to that 6 million tons of low-copper shred, it puts us at about 10 million tons of metallics that we control, which is about two-thirds of our need.

And so in terms of where we sit today I would share with you. We can process today about one 4 million tons of low copper shred and we're bringing on another 750000 tons as we speak so that'll give us in the very near future about $2 1 million tons of capacity.

Speaker Change: And then as we look out another couple of years I would expect us to add another three five to 4 million tons of additional capacity landing us somewhere in the five five to 6 million ton range for low copper shred.

Speaker Change: But Martin I'll share with you.

Martin John Englert: Think about the 4 million tons of DIY that we also make and you add to that 6 million tonnes of low copper shred. It puts us at about 10 million tonnes of metallics that we control, which is about two thirds of our needs.

Allen C. Behr: And so that's a sweet spot for us because it gives us incredible control while at the same time allowing us the ability to be very flexible and very opportunistic in the market and how we serve the rest of our needs. I know you asked about Electra, too, and I just want to talk about that for a minute.

Martin John Englert: And so that's a sweet spot for us because it gives us incredible control while at the same time, allowing us the ability to be very flexible and very opportunistic in the market and how we serve the rest of our needs.

Noah: I know you asked about electric too and I just wanted to talk just for a minute about that I think what I'd say is we remain really excited about that project. Its got a long ways to go but it's a very interesting technology, we remain an investor and are considering additional investments in that space and Noah and I work on that together and are following that closely.

Allen C. Behr: I think what I'd say is we remain really excited about that project. It's got a long ways to go, but it's a very interesting technology. We remain an investor and are considering additional investments in that space, and Noah and I work on that together and are following that closely. It's got really interesting advantages for us, particularly in the lower carbon range. I wouldn't consider that a cost benefit, but that's primarily a green and sustainability benefit and really exciting technology. Thank you for all the, excuse me, thank you for all the detail. That's helpful. If I could, I'd put one last one there.

Scott.

Scott: Really interesting advantages for us, particularly in the lower carbon range I wouldn't consider that cost benefit, but thats, primarily a green and sustainability benefit and really exciting technology.

Speaker Change: Thank you for all of it excuse me. Thank you for all the detail that's helpful.

Speaker Change: I could one last one there sequentially.

Steve: The sequentially implied steel conversion costs seem like they've stepped higher quarter on quarter. You've guided to flat conversion costs in 3Q. Can you touch on what led to the sequential step-up in unit conversion costs in 2Q? Hey, Martin. This is Steve.

Conversion costs seem like they stepped higher quarter on quarter.

Speaker Change: I did too flat conversion costs in Q can you touch on what led to the sequential step up in <unk>.

Speaker Change: Unit conversion costs into Q.

Steve: Thanks for the question. The conversion costs are really a function of a few different things, a few different moving parts. In the quarter, what you see is utilization rates were down a bit. That always affects our costs. But probably more pronounced, there is a flow of materials through our production processes that creates a little bit of timing differences, and that causes the conversion cost to look higher on a quarter-over-quarter comparison. I think the most important thing for you to take note of is that input costs right now are moderating consistent with what you see with CPI or other indicators. Okay, excellent. Thanks for the additional cover there.

Speaker Change: Hey, Martin this is Steve thanks for the questions.

Conversion costs really are a function of a few different things to different moving parts.

Speaker Change: In the quarter and what you see.

Speaker Change: Utilization rates were down a bit that always affects our cost.

Speaker Change: Probably more pronounced there is a flow of material through our production processes that creates a little bit of timing differences.

Speaker Change: That causes the conversion cost will look higher on a quarter over quarter comparison, I think the most important thing probably for you too.

Speaker Change: Note of is the input costs right now are moderating consistent with.

Speaker Change: What you see with CPI.

Speaker Change: Other indicators.

Speaker Change: Okay excellent thanks for the additional color there.

Speaker Change: Okay.

Operator: Thanks, Mark. Your next question comes from the line of Tristan Gresser on the MPTOW bus. Your line is now open.

Mark: Thanks Mark.

Speaker Change: Your next question comes from the line system from BNP Paribas. Your line is now open.

Tristan Gresser: Hi, good morning, and thank you for taking my questions. The first one is on the policy front. When you look at the upcoming elections, what risks do you see?

Speaker Change: Hi.

Speaker Change: Good morning, and thank you for taking my questions.

Speaker Change: First one is on the policy front when.

Speaker Change: When you look at the upcoming elections, what risks do you see I mean.

Leon J. Topalian: I mean, for instance, solar and wind have been a source of growth. How concerned are you of any potential new administration removing some of the funding for those areas? Yeah, Tristan, it's really hard to speculate today on what might come in a change of control in the administration. You know, from a macro standpoint, I would tell you Nucor has had incredible success with both Democratic as well as Republican candidates in office.

Speaker Change: For instance, solar and wind.

Speaker Change: Been source of growth.

Speaker Change: Potential upside for.

Speaker Change: For your business. So how concerned are you or any potential new administration.

Speaker Change: Removing some of the funding for those areas.

Speaker Change: Yes, Tristan it's really hard to speculate today on what might come in a change of control and the administration from a macro standpoint, I would tell you Nucor has had incredible success with both.

Speaker Change: Democratic as well as Republican.

And at HCN office.

Leon J. Topalian: As we think about that again, not trying to completely evade your question or be so ambiguous, you know, would there be some pressure on IRA, and would there be some potential for that? Yeah, we've heard the same rumors as well.

Speaker Change: As we think about that again not trying to completely your question or be so ambiguous.

Speaker Change: Would there be some pressure on.

Speaker Change: IRA and there'll be some potential for that yes, we've heard the same rumors as well where does the overall impact to nucor.

Leon J. Topalian: What is the overall impact of Nucor? Well, it's. It's really hard to predict.

Leon J. Topalian: What I would tell you is our strategy is to invest in the long term. We're not overweighted to any single, so we serve an incredibly diverse range of customers, and have an incredible range of capabilities for those customers, so we're not so overweighted to offshore wind or certain elements of that that if it changed, it would be... impacting the new quarter. But on the other side of that, if that changes, do you see different benefits and some tailwinds from tax relief and less regulation for investment moving forward? And so again, it's really a very difficult question to speculate on what might happen tomorrow with a different president.

Speaker Change: It's really hard to predict what I would tell you is our strategy is to invest in the long term, we're not over weighted to any single.

Speaker Change: Side of the market. So we survey incredibly diverse range of customers having.

Speaker Change: Full range of capabilities for those customers. So we're not sure over weighted to offshore wind or.

Speaker Change: Sure.

Speaker Change: Elements of that that if it changed it would be.

Speaker Change: Impacting the Newport, but on the other side of that if those change do you see different benefits.

Speaker Change: Tailwind from tax.

Speaker Change: Relief less regulation for investment moving forward and so again, it's really a very difficult question to speculate on what might happen tomorrow with a different.

Leon J. Topalian: And so we'll just have to wait and see. But again, I love how we're positioned. I love the strength and strength of our portfolio, and we're headed in a direction that I think is going to continue to serve this market incredibly well. All right, no, I understand and I appreciate the caller and have a quick follow-up to that when it comes to trade. A little bit again, what do you believe should be the new administration's number one priority when it comes to steel? I mean, you've been vocal about Vietnam being an issue. Is there a specific trade case against the country?

Speaker Change: Different precedent and so we'll just have to wait and see but again I love, how we're positioned I love the breadth and strength of our portfolio and where we're headed that I think is going to continue to serve this marketplace incredibly well.

Speaker Change: Okay Alright.

Speaker Change: I understand and I appreciate the color and as a quick follow up to that when it comes to trade.

Speaker Change: But again, what do you believe should be the new administration number one priority when it comes to steel I mean, you've been vocal about Vietnam being an issue is there a specific trade case against the country in Mecca.

Leon J. Topalian: And Mexico, the New Deal. To your understanding, does Brazil have an exemption? Yeah. Where do you see where... What would you be pushing for? Yeah, look, you touched on some of that.

Speaker Change: Mexico, the new deal.

Speaker Change: To your understanding this Brazil have an exemption.

Speaker Change: Yes.

Speaker Change: Sure.

Speaker Change: What would you be pushing for.

Leon J. Topalian: And what I would tell you is that we've always advocated for not free trade, but fair trade, to make sure that our trading partners are actually following the TRQs that are put in place, things like the USMCA. So while we think it's the right first step that the administration put into place a few weeks ago with Mexico, it's not enough. We still have concerns with rebar, with electrical conduit, with some other products that we see are surging that have to get brought back into control. We've looked at the fabricated steel products sector, which has more than doubled its import levels from about 1, 1.2 million tons. We believe that it's closer to 2.4 million tons today.

Speaker Change: Yes look you touched on some of that and what I would tell you is we've always advocated.

Speaker Change: Sri trade, it's fair trade to make sure that our training centers are actually following peer accused that are put in place.

Speaker Change: Things like the U S MCA.

Speaker Change: Sure.

Speaker Change: We think it's the right first step.

Speaker Change: The administration put into place a few weeks ago with Mexico. It is not enough, we still have concerns with rebar with electrical conduit.

Speaker Change: With some other products that we see are searching that have to get brought back into control. We've looked at the fabricated steel products sector over the last several years has more than doubled its import levels for about $1 2 million tons. We believe that's closer to $2 4 million tons. Today that has got to get curve that has got again.

Leon J. Topalian: That has got to get curved, that has got to get brought into control. And then again, the other piece of all of that is if we begin to pick apart the most recent announcements with exclusions. You know, it was all for naught. It wouldn't have had any teeth put into it.

Speaker Change: Brought into control and then again the other piece of all of that is if we begin to.

Speaker Change: To pick apart the.

Speaker Change: The most recent announcements with exclusions.

It was all for not it won't have any teeth put into it so again youre going to see Nucor continue to advocate.

Leon J. Topalian: So again, you're going to see Nucor continue to advocate vocally and in Washington, regardless of the administration, to create a level playing field that protects this industry from illegally dumping subsidized deals into the shores of the United States. All right, that's very clear. And maybe the last one, if I can squeeze that in on the plate, you made a big pricing adjustment last month.

Speaker Change: Locally and in Washington, with regardless of the administration to create a level playing field that protects this industry from illegally dumping subsidize deals for making into the shores I think not.

Speaker Change: Stage.

Leon J. Topalian: So what are you seeing from a demand perspective? Do you think you've hit the bottom in terms of prices, and you're starting to see a bit more stable demand environment, or is there further adjustment to come? And if you can touch on the little, the various end users and markets, that would be appreciated.

Speaker Change: Alright.

Speaker Change: That's very clear and maybe the last one if I can squeeze that in on plate.

Speaker Change: A big pricing adjustment last months.

Speaker Change: What are you seeing from a demand perspective, you think <unk> hit the bottom in terms of prices Youre starting to see is it more stable demand environment or.

Speaker Change: Are there further adjustment to call me if you can touch on the little the various end user end markets that would be appreciated.

Brad Ford: And Tristan, I'll ask Brad Ford to speak to our current, I think it's important to start with some context. We're coming off of some pretty strong years for plates. Really, 21, 22, and 23 were pretty robust.

Speaker Change: Sure, it's Chris and I'll ask.

Brad: Brad forward to speak to our.

Brad: Our current <unk>.

Brad: Outlook in the <unk> group and go from there.

Brad: Thanks, Leon Thanks for the question Tristan.

Speaker Change: I think it's important to start with some context, we're coming off of some pretty strong years replaced.

Speaker Change: The 'twenty one 'twenty two 'twenty three were pretty robust.

Brad Ford: So as we think about this market being a little bit softer, there are a couple things to address. One, you know, we are seeing some softness in the more interest rate sensitive portions of the market, namely the vertical construction, some of the heavy equipment, and agriculture side. And two, and most significantly... You know, back to the import conversation, we were challenged in the first half of this year by meaningfully higher levels of imports, which gained some market share and put pressure on pricing.

Speaker Change: So as we think about this market being a little bit softer there is a couple of things to address.

Speaker Change: One we are seeing some softness in the more interest rate sensitive portions of the market.

Speaker Change: Namely kind of vertical construction some of the heavy equipment and agriculture side.

Speaker Change: And two the most significantly.

Speaker Change: Back to the import conversation we were challenged in the first half of this year, but meaningful.

Speaker Change: Meaningfully higher levels of imports.

Speaker Change: <unk> gained some market share and put pressure on pricing.

Brad Ford: You know, this pressure on pricing has led our distribution customers to take a pretty cautious approach to purchasing as they try to right-size their inventories. All that said, we do see some bright spots as we think about the second half of the year.

Speaker Change: This pressure on pricing has led our distribution.

Speaker Change: Customers to take a pretty cautious approach.

Speaker Change: To purchasing as they try to right size their inventories.

Speaker Change: All that said, we do see some bright spots.

Speaker Change: We think about the second half of the year.

Brad Ford: Back to imports, we've seen certain countries use up almost two-thirds of their quota really through the first five months of this year, so we expect a slightly lower import picture in the second half. Bridge and power transmission markets remain strong, and what we're hearing from our customers and developers is onshore wind is really going to pick up kind of late in the second half. And then there's the impact from IIJA funding and project awards, really, as we think about those kicking in here in late 24 and early 25, which supports not just plate but our structural businesses and a lot of our steel products. Okay, that's very clear. Thank you very much. Thanks, Tristan.

Speaker Change: Yes back to imports we've seen certain countries use up almost two thirds of their quota really through the first five months of this year. So we expect a slightly lower import picture in the second half.

Speaker Change: <unk> power transmission markets remained strong and what we're hearing from our customers and developers is onshore wind is really going to pick up kind of late in the second half.

Speaker Change: And then there is the impact from IGN funding and project awards really as we think about those picking up.

Speaker Change: Late 'twenty four in early 'twenty, five which supports not just plate, but our structural business and a lot of our steel products.

Speaker Change: Okay.

Speaker Change: Very clear thank you very much.

Kristen: Thanks Kristen.

Chris Lamina: Your next question comes from the line of Chris Lamina from Jeffries. Your line is now open. Hey, thanks, operator. Hey, guys, it's Chris LeFemina from Jeffrey's.

police lamina: Your next question comes from the line of police lamina from Jefferies. Your line is now open.

Leon J. Topalian: Leon, you mentioned automation in the steel product segment, and you've alluded to it a bit in the past, but I was wondering if you could kind of elaborate on how automation, I mean, what sort of cost benefits might you see? Is it sort of... Do you think you can become an even lower-cost producer relative to the rest of the industry through some of the automation initiatives that you're putting in place? Yeah, Chris, I appreciate the question. I would tell you I like our position where we sit today.

police lamina: Hey, Thanks, Operator, Hey, guys, it's Chris <unk> from Jefferies. Leon you mentioned.

Chris: Automation in the steel products segment, and you've alluded to it a bit in the past, but I was wondering if you could kind of elaborate on how automation could.

Chris: Could impact your margins I mean, what sort of cost benefits might you see is this sort of crisis.

Speaker Change: You just need to remain competitive or do you think that you can you can become.

Speaker Change: And even lower producer relative to the rest of the industry by some of the automation initiatives that you're putting in place.

Leon J. Topalian: I think we are cost competitive with anyone in the world. And again, we have always advocated that we will compete against anyone in the world as long as it's done fairly. Now, back to the import question. But regarding automation and AI, it's something that I would tell you Nucor is embracing and embracing, and the changes are coming at an incredible rate of speed. And so we're seeing the potential applications of AI and automation in a whole raft of different areas of our businesses, technologies that we're using to deploy to create safer outcomes for our team members, to create cost advantages, to create efficiencies.

Speaker Change: Yes, Chris I. Appreciate the question I would tell you I like our position, where we sit today I think we are cost competitive with anyone in the world.

Speaker Change: And we've always advocated we will compete against anyone in the world. So long as it's done fairly again back to the important question, but regarding automation regarding AI and something that I would tell you nucor's embraced and embracing and the changes are coming at an.

Speaker Change: Credible rate of speed and so were seeing.

Speaker Change: The potential applications of AI and automation and a whole raft of different areas of our businesses technologies that we're using to deploy to create safer outcomes from our team members to create cost advantages to create efficiencies and so I'd like Chad you Tomorrow couche over our.

Leon J. Topalian: And so I'd like Chad Unimark, who's in charge of our innovation group, and maybe John Hollatz to just touch on maybe a few of those specifics. Chad and John, if you would, would give Chris a little more detail and background on what we're doing, how we're embracing that.

Chad: Innovation has been maybe.

Jonathan: John how much to just touch on maybe a few of those specifics Jonathan Jon If you would to give.

Chris a little more detail and background of what we're doing how we are embracing that.

Chad Unimark: Yeah, thanks, Leon. Yeah, Chris, not only is it a cost opportunity, but it's a flexibility opportunity, especially in our businesses. It's basic, healthy, and also a safety opportunity for our teammates. When you think about expanding on yes, we're going to continue to invest and look for businesses so that we can bring technology that will allow us to be more efficient and take care of our customers. Some specific examples in our Nucor Racking Group, we have robotic well cells that are operating at several of our facilities right now.

Thanks, Leon, Yes, Chris not only as a cost opportunity, but it's a flexibility opportunity, especially in our businesses.

Jonathan: Penalty and also safety opportunity for our teammates.

Jonathan: When you think about expand beyond yes, we're going to continue to invest and look for businesses.

Jonathan: We can bring technology that will allow us to be more efficient and take care of our customers. Some specific examples of our new core racking group, we've invested and we have robotics well sales that are operating at several of our facilities right now.

Chad Unimark: And we're excited about what we're seeing there. We've mentioned this before, but our two new tower and structure greenfield plants. They have highly automated material handling equipment, as well as robotic plasma and well cells, and we look forward into the spring and fall of next year as we bring those plants online and see the automation take place.

Jonathan: And we are excited about what we're seeing there we've mentioned this before but our two new tower and structure Greenfield plants.

Jonathan: They have highly automated material handling equipment as well as robotic plasma and well sales and we look forward into the spring and fall of next year as we bring those plants online and see the automation take place.

Chad Unimark: You know, as a reminder, many of our downstream visits to Nucor face these demand fluctuations through the cycle. And what we are seeing is that automation in key manufacturing areas can really help us navigate those demand fluctuations so that we can really take care of our customers. John?

As a reminder, many of our downstream businesses, new core phases demand fluctuations through the cycle.

Jonathan: And what we're seeing is that automation in key manufacturing areas can really help us navigate that demand fluctuations. So that we can really take care of our customers John.

John J. Hollatz: Yeah, thank you, Chad, and thank you, Chris, for the question. I'll share a couple of other examples from a few of our operations. One is our SBQ mill in Memphis, Tennessee, where our team has embraced AI to optimize the production scheduling of a very complex steelmaking process. We've been able to reduce the human hours committed to this process by about 80% through the use of AI. In addition to that, we also benefit from yield savings, reducing working capital, and operational efficiency. Switching gears to another project, for the last six years, we have been developing a robotic choice line at Fullcraft in South Carolina. Joist production traditionally has been a very labor-intensive process.

John: Thank you Chad and thank you Chris for the question I'll share a couple of other examples from a few of our operations.

Speaker Change: As our <unk> mill in Memphis, Tennessee, where here our team has embraced AI to optimize.

Speaker Change: Production scheduling.

Speaker Change: Complex steelmaking process.

Speaker Change: We've been able to reduce our man hours committed to this process by about 80% through the use of AI. In addition to that we also benefit from yield savings.

Reducing working capital and operational efficiencies.

Speaker Change: Switching gears to another project for the last six years, we have been developing a robotic choice line at full craft in South Carolina.

Speaker Change: Joyce production traditionally has been a very labor intensive process this new robotic line, which.

John J. Hollatz: This new robotic line, which we have been operating now for about one year, utilizes patented robotics and vision technology to perform the assembly and welding of joists. This is really a game-changer for our team, and we're looking to grow this across the rest of our joist operations in the future. Hey, Chris, this is Stephen.

Speaker Change: Operating now for about one year utilizes patented robotics and vision technology to perform the assembly and welding of choice. This is this is really a game changer for our team and we're looking to grow this across the rest of our choice to operations.

Stephen: I'll just add one other thing to address your question about an advantage or not. Nucor has always been about creating production efficiencies. That's how we win.

Speaker Change: Hey, Chris This is Steve I'll, just add on one other thing to address your question about <unk>.

Speaker Change: Advantage or not Nucor has always been about creating production efficiencies that's how we win.

Chris I.: What about the scale and reach of what we do any technology advantage is leveraged across a bigger system for more more gains.

Chris I.: I'll call that call that a scale efficiency. If you want to nucor is unparalleled in our industry and the ability to do that.

Stephen: And so if you think about the scale and reach of what we do, any technological advantage is leveraged across a bigger system for more gains. So I'll call that scale efficiency if you want to. Nucor is unparalleled in our industry in the ability to do that. Thank you. It's very helpful.

Speaker Change: Thank you that's very helpful. I appreciate that.

Chris I.: Okay.

Operator: I appreciate it. Your next question comes from the line of Philip Gibbs from KeyBank Capital Markets. Your line is now open. Hey, good morning.

Chris I.: Your next question comes from the line of Philip Gibbs from Keybanc capital markets. Your line is now open.

Philip Ross Gibbs: Hey, good morning.

Phil: Good morning, Phil.

Philip Ross Gibbs: [inaudible] So you called out in the press release $137 million in startup costs. Is the vast majority of that related to Brandenburg at this point? Yeah, hey Phil, this is Steve.

Philip Ross Gibbs: So you called out in the press release, the $137 million of startup costs.

Philip Ross Gibbs: Is the vast majority of that related to Brandenburg at this point.

Steve: It's really two projects, Brandenburg, which is slightly, a little bit bigger in the quarter, Impact, and West Virginia. As we're accelerating the spinning at West Virginia, you're seeing a little bit more impact there. Okay, are you also including non-cash costs in that number? No, no, generally not.

Philip Ross Gibbs: Yes, Hey, Phil This is Steve its really two projects, Brandenburg, which slightly a little bit bigger in the quarter impact in West Virginia.

Phil: Yes.

Phil: Sure.

Phil: As we are accelerating the spending at West, Virginia, Youre seeing more a little bit more impact there.

Phil: Okay.

Speaker Change: Are you also including.

Speaker Change: Noncash costs in that number.

Speaker Change: No generally not.

Speaker Change: It's generally contractor work and.

Speaker Change: Site specific work.

Speaker Change: Okay.

Steve: It's generally contractor work and site-specific work, which leads me into my next question. So West Virginia, I think the plan is to get it started, at least in terms of some level of commissioning, in 2025, but it sounds like it's probably more so in the back half of the year based on your... SlideDeck, and then also ramping throughout 26 and 27 as you build product capabilities. Is that the way to think about it? It's a year later, so back half of the end of 26. Phil is when we'll ramp up Brandenburg into 27. I'm sorry, West Virginia, Dr. Brandenburg. Yes, West Virginia.

Speaker Change: Me into my next question, So West Virginia.

Speaker Change: I think plan is to is to get it started.

Speaker Change: At least in terms of.

Speaker Change: Some level of commissioning.

Speaker Change: In 2025, but it sounds like it's probably more so on the back half of the year based on your slide.

Speaker Change: The slide deck, and then also ramping throughout 2006 and 2007 as you build product capabilities is that the way to think about it.

Speaker Change: It's a year later, so back half end of 'twenty six.

As one will ramp up Brandenburg and into 'twenty seven.

Speaker Change #100: I am sorry in West Virginia.

Speaker Change #101: Yes, West Virginia.

Steve: Okay, and you all said in your deck that conversion costs are expected to be flat quarter and quarter. Did you have any... Do you have anything from a maintenance perspective to call out in particular in 2Q, and do you have any maintenance outages in the third quarter, anything beyond normal? And now, Phil, in terms of overall in the company, you won't notice it necessarily, but in some of the segment numbers, some of those maintenance costs at our DRI plants as we have outages do swing the cost impacts a little bit in that segment. How's that, Nucor Steele?

Speaker Change #100: Okay.

Speaker Change #102: You all set in your deck that conversion costs expected to be flat quarter on quarter did you have any.

Speaker Change #103: Anything from a maintenance perspective to call out in particular in <unk> and do you have any any maintenance outages in the third quarter or anything beyond beyond normal.

Speaker Change #103: Sure.

Speaker Change #103: In terms of overall in the company you won't notice it necessarily but in some of the segment numbers.

Speaker Change #104: Some of this maintenance cost at our <unk> plants as we have outages.

Speaker Change #104: Do swing the swinging the cost impacts a little bit in that segment.

Speaker Change #104: I was asking for steel.

Speaker Change #104: Yes.

Steve: Yeah, for Steele now, there's, there's, you shouldn't see any pronounced impact at the end of the third quarter. Okay, and then lastly for me, any update in terms of what to think about CAPEX for this year or next, to the extent that you didn't mention it? Thank you. Yeah, so the guidance we've given for the year is about three and a half billion for APEC spending. We'll keep an eye on that.

Chris I.: Yes, Chris steel now.

Chris I.: You Shouldnt see any pronounced impact.

Speaker Change #105: Good quarter.

Speaker Change #105: Okay.

Speaker Change #105: And then lastly for me.

Speaker Change #105: Any other.

Speaker Change #106: Update in terms of what to think about Capex for this year or next to the extent that you you didn't mention this thank you.

Speaker Change #107: Yes sure.

Speaker Change #108: Guidance, we've given on the year, it's about $3 5 billion for Capex spend we will keep an eye on that we'll update as we have in the past years as we get closer to the end of the year, if we see any meaning.

Steve: We'll update you as we have in the past years as we get closer to the end of the year if we see any meaningful adjustment to that. And then Leon mentioned in his prepared remarks at the outset of the call that for the next couple of years, you'll see an elevated level of capital spending as we move through some of these projects. It's about six and a half billion dollars of really larger projects that you'll see us move forward on in the next couple of years. Thank you. Thanks, Phil. Your next question comes from the line of Alex Hacking from Citi. Your line is now open. Yeah, good morning.

Leon J. Topalian: A meaningful adjustment to that and then Leon.

Speaker Change #109: Mentioned it in his in his prepared remarks.

Leon J. Topalian: Call that for the next couple of years, you'll see an elevated level of capital spending as we move through some of these some of these projects is about $6 5 billion.

Speaker Change #110: That's a really.

Speaker Change #110: Larger projects that you.

Speaker Change #110: Youll see us move.

Speaker Change #110: Forward all in the next couple of years.

Speaker Change #110: Thank you.

Phil: Thanks, Phil.

Alexander Nicholas Hacking: I wonder if you could maybe comment on how much incremental steel demand, if any, you're really seeing from the IIJA at this point, or is that still something that's on the horizon? Thanks. Yeah, what I would tell you, Alex, is a couple things. If we think about those three pieces of legislation, I would tell you that the CHIPS Act is, you know, by far, the most forward we're seeing steel getting processed and put through and again that moving at a much higher rate or, you know, I think follow that by some of the IRA, particularly in your torque tubes and some of the applications within the wind and solar.

Speaker Change #111: Your next question comes from the line of Alex Zukin from Citi. Your line is now open.

Alex Zukin: Yes, good morning.

Speaker Change #113: Wonder if you could maybe comment.

Alex Zukin: On how much incremental steel demand.

Speaker Change #114: If any you are really seeing from <unk> II.

Speaker Change #115: At this point.

Speaker Change #116: Or is that still something that's on the horizon. Thanks.

Alex Zukin: Yes, what I would tell you Alex is couple of things. If we think about those three pieces of legislation I would tell you that the chips Act.

Alex Zukin: By far.

Alex Zukin: The most out front and we're seeing.

Speaker Change #117: That steel getting processed and put through an <unk>.

Speaker Change #117: And then moving that up.

Speaker Change #117: Much higher rate.

Speaker Change #117: I think follow that.

Speaker Change #117: By some of the IRI, particularly in.

Speaker Change #117: Torque tubes, and some of the applications within the wind and solar and then lastly, and again still early innings on the infrastructure Bill itself and so one of the things to keep in mind is.

Alexander Nicholas Hacking: And then lastly, and again, still early innings on the infrastructure bill itself. And so, one of the things to keep in mind is, you know, that through the cycle, kind of start to finish by the time the state requests the funds to see it hit the books could be two years.

Speaker Change #117: Through cycle.

Speaker Change #117: Start to finish by the time the state request the funds.

Speaker Change #117: Seeing hit the order book could be two years. So again that we have a long maturation process that's in there.

Leon J. Topalian: So again, we have a long maturation process that's in place from, you know, the federal package passed to the state actually getting the money for the bridge roadwork or the infrastructure that they want to rebuild in that state. So that we believe will continue to increase in the years to come as more and more states continue to move further up that, you know, that process map of actually getting those funds into the states. But it's still early days. Okay, thanks.

Speaker Change #117: Federal package.

Speaker Change #117: Due to the state actually getting the money for the bridge road work toward the infrastructure that they want to rebuild in that state. So.

Speaker Change #117: That we believe will continue to increase in the years to come as more and more states continue to move further up that.

That process map of actually getting those funds into the states, but it's still early days.

Alexander Nicholas Hacking: And then just to follow up on Brandenburg, if I could, you know, right now it's operating around a 20% utilization rate. If the plate market was booming, Now, is there anything stopping Brandenburg from... From a technical perspective, ramping up to 100% utilization rate over the next 6-12 Months, or, You know, are you still in that startup phase, you know, proving out the capabilities? Bayes, and Mr. Mill are really not ready to run at that rate yet.

Speaker Change #118: Okay. Thanks, and then just a follow up on Brandenburg, if I could.

Speaker Change #119: Right now its operating around 20% utilization rate.

Speaker Change #120: <unk> market was booming.

Speaker Change #121: Is there anything stopping Brandenburg from.

Speaker Change #121: From a technical perspective to <unk>.

Speaker Change #121: Ramping to 100% utilization rate over the next.

Speaker Change #121: Six to 12 months or.

Speaker Change #122: Are you still in that startup phase proving out the capabilities.

Speaker Change #123: The mill is really not ready to run at that rate yet.

Leon J. Topalian: Thanks. Yeah, look, a really, really good question, Alex. And here's what I would tell you. The short answer is no.

Speaker Change #123: Yes look really really good question, Alex and here's what I would tell you the short answer is no.

Leon J. Topalian: You know, we anticipate, and the team at Brandenburg continues to do an amazing job of bringing that mill online. So we expect that, even despite market conditions, that mill will be able to achieve its full run rate capabilities in 2024. Now, we'll decide how long we need that and how long they run at those capabilities. But no, from a technical perspective, yeah, they're still working out some bugs, but there's nothing materially that's going to keep us from achieving that full rate.

Brian <unk>: We anticipate and the team at Brian <unk> continues to do a amazing job of bringing that mill online. So we expect that even despite market conditions that mill will be able to achieve its full run rate capabilities.

Brian <unk>: In 2020 for now we will decide how long we need that and how long they run at those capabilities, but no from a technical perspective, yes. They are still working out some bugs, but theres nothing materially that.

Brian <unk>: Going to keep us from achieving that full rate.

Leon J. Topalian: Capacity Situation by Year's End. And again, we'll be mindful as we think about how we introduce those tons to the market. Obviously, we know our plate market, we know the customers. And again, we've been selling in the plate market for over 20 years now. So we'll be mindful about how we think about that. But at the same time, balancing that team's got to be able to achieve that so that when it's required, they know they can hit that last year and produce all the tons that are required for our market. Thank you. Okay, thank you all. Your next question comes from the line of Timna Tanners from Hall Thesis. Your line is now open. Hey, thank you, and good morning, everyone.

Brian <unk>: Capacity.

Brian <unk>: The situation by year's end and again, we will be mindful as we think about how we introduce those touch to the market. Obviously, we know our.

Brian <unk>: Market, we know the customers and again, we've been selling in the plate market for over 20 years now so it won't be mindful about how we think about that the same time balancing that team has got to be able to achieve that so that when it's required. They know they can hit last year and produce all the tons that are required for our market.

Speaker Change #125: Thank you.

Alex Zukin: Okay. Thank you Alex.

Speaker Change #126: Your next question comes from the line of Deane that Tim Tanners from Wolfe Research. Your line is now open.

Speaker Change #127: Okay. Thank you and good morning, everyone.

Timna Beth Tanners: I have a near-term question and a bigger-picture question. So, in the near-term, I wanted to ask about the magnitude of the EBITDA decline commentary and if it was more about pricing than volume again, as you said last quarter. And then same concept, but just wanted to follow up on the downstream segment. If indeed the squeeze and tubular were about the higher-cost substrate, Yeah, look, Timna, that's a fair assumption and assessment.

Speaker Change #128: I will have a near term question and a big quick picture question. So in the near term I wanted to ask about the magnitude of EBITDA decline commentary and if it was more about pricing and volume again as you said last quarter and then same same concept, but just wanted to follow up on the downstream segment.

Timna Tanners: So, in the near-term, I wanted to ask about the magnitude of EBITDA decline commentary, and if it was more about pricing than volume again, as you said last quarter. And then the same concept, but just wanted to follow up on the downstream segment. If, indeed, the squeeze and tubular was about the higher cost substrate, and that should be normalizing, Tristan Dex should be normalizing. So, we not see like a smaller magnitude of decline in the downstream.

Speaker Change #129: If indeed, the squeeze and keep it there was about the higher cost substrate and that should be normalizing that.

Speaker Change #130: That should be normalizing.

Speaker Change #131: Not see like a smaller magnitude of decline in the downstream.

Leon Topalian: Yeah, look, Timna, that's a fair assumption and assessment. What I would tell you is we think about products.

Leon J. Topalian: What I would tell you as we think about products, the reason we forecasted a decline in Q3 is for a few reasons. One, they're still working through some of that higher-priced backlog that we know is going to flow through in the coming weeks and next couple of months. However, again, one of the bright spots as we think about where inflation is, unemployment, and a little bit more elevated, seeing the Fed's appetite for, or at least intimation for, some rate cuts, that certainly could have some considerable impact, particularly on the product segment that you would see more likely in the back half of the year, Q4 and into Q1.

Timna: Yes timna.

Timna: Thats a fair assumption.

Timna: But what I would tell you as we think about products they are there.

Leon Topalian: The reason we forecast today decline in Q3 is in few reasons; while they're still working through some of that higher price backlog, that's going to, we know it's going to flow through in the coming weeks and next couple of months. However, again, one of the bright spots is we think about where inflation is, unemployment, and a little bit more elevated. Seeing the Fed's appetite, or at least intimation for some raid cuts, that certainly could have some considerable impact, particularly to the products segment that, you know, you would see more likely the back half of the year Q4 and into Q1.

Timna: The reason, we forecasted a decline in Q3 is a few reasons why they are still working through some of that higher price backlog, that's going to we know is going to flow through in the coming weeks and next couple of months. However, again, one of the bright spots as we think about where.

Timna: Inflation is unemployment and a little bit more elevated.

Timna: Seeing the fed's appetite or at least information for some rate cuts that certainly could have some.

Timna: Considerable impact, particularly to the product segment that you would see more likely the back half of the year Q4 and into Q1, but.

Leon J. Topalian: But again, we know what our backlogs are. Those backlogs are heavy. And again, from a demand picture in the Volcraft and Joyston decks, we're out for the rest of the year in terms of that backlog strength, but we also know what that pricing is. And again, we're going to see some squeeze on that as we get into Q3. Yeah, Timna, I just add to what Leon said about the first part of your question about the near term. It's much more about pricing and margin pressure than it is volume pressure. So you were correct in that assumption.

Leon Topalian: But, again, there's, we know what our backlogs are. There's backlogs are strong and, again, from a demand picture in the Valkraft and Joyce and Dex, we're out for the rest of the year, in terms of that backlog strength. But we also know what that pricing is, and again, we're going to see some squeeze on that as we get into Q3.

Timna: Again, there is.

Speaker Change #133: We know what our backlogs are those backlogs are strong and hit from a demand picture.

Speaker Change #133: The bulk craft joist and deck or or out for the rest of the year in terms of that backlog strength, but we also know what that pricing is and again, we're going to see some.

Speaker Change #133: Some squeeze on that as we get into Q3.

Leon Topalian: Yeah, I just add, and to what Leon said, the first part of your question about the near term, it's much more about pricing and margin pressure than it is volume pressure. So you were, you were correct in that, and that assumption.

Speaker Change #133: Yes, Tim I'd, just add Lee answered the first part of your question about the near term.

Speaker Change #134: It's much more about pricing and margin pressure than it is volume pressure. So you were correct in that and that assumption okay.

Steve: Okay, thanks. And then taking a step back on the big picture, there is an incredible amount of appetite for grain-oriented electrical steel and also for further options on automotive exposed steel. And I know we've talked about this in the past, but I've been hearing Gallatin can make thicker grades.

Timna Tanners: Okay, thanks. And then taking a step back on the big picture, there is an incredible amount of appetite for grain-oriented electrical steel and also for further options on automotive exposed.

Speaker Change #135: Okay. Thanks, and then taking a step back on the Big picture and there is an incredible amount of appetite for grain oriented electrical steel and also for further options on automotive exposed and I know we've talked about this in the past, but I've been hearing gallatin can make thicker grades in the West Virginia is targeting auto can you just remind us.

Timna Tanners: And I know we've talked about this in the past, but I've been hearing galloping to make thicker grades, and the West Virginia's targeting auto. Can you just remind us, hey, you know, when could you make some of these other auto grades and compete more broadly in the auto sector? Is that still the design, and is grain oriented even out on your radar still?

Speaker Change #136: When could you make some of these other auto grades and compete more broadly in the auto sector is that still the design and the grain oriented even on your radar. So I just wanted an update there. Thanks.

Timna Beth Tanners: I just wanted to update their thanks.

Timna Beth Tanners: I know West Virginia is targeting the auto industry. Can you just remind us, A, you know, when you could make some of these other auto grades and compete more broadly in the auto sector? Is that still the plan?

Leon Topalian: Yeah, Tim, I'll kick it off and certainly open it up to anyone that, you know, wants to add some thoughts. But, well, kids, we think about the auto sector of the last couple of years. We're supplying in that one to one and a half to one point six million tons annually. So it's a customer base. We know we've got a grain relationship with many of the big OEMs. There are appetite for our iconic steels has been incredible. We've achieved the Supplier of the Year award with General Motors for, you know, going on, you know, five years and hopefully that will continue.

Speaker Change #136: Yes, Timna I'll kick it off and certainly open it up to anyone that.

Speaker Change #137: Once you add some some thoughts but look as we think about the auto sector over the last couple of years, we're supplying in that one to one five to $1 6 million tons annually. So it's a customer base. We know we've got a great relationship with many of the big Oems their appetite for our Iconix deals has been incredible we've achieved.

Leon J. Topalian: And is grain-oriented still on your radar? I just wanted an update there. Yeah, Timna, I'll kick it off and certainly open it up to anyone that, you know, wants to add some thoughts. But look, as we think about the auto sector, over the last couple of years, we're supplying that one to one and a half to 1.6 million tons annually. So it's a customer base; we know we've got a great relationship with many of the big OEMs; their appetite for our iconic steels has been incredible.

As the supplier of the year Award with General Motors for.

Leon J. Topalian: We've achieved the Supplier of the Year Award with General Motors for, you know, going on, you know, five years, and hopefully that will continue. And so, our expectation is to double that volume in the next several years. And so, as you see, West Virginia coming online, that is going to be a key focus for us. How we think about how far upstream we go into that, like the exposed automotive, we'll wait and see. Again, we know we can produce those steals, and we're going to be deliberate about how we think about doing that.

Speaker Change #137: Going on five years, and hopefully that will continue.

Leon Topalian: And so our expectation is to double that volume in the next several years. And so, as you see, West Virginia come online, that is going to be a key focus for us. How we think about how far upstream we go into that, like the exposed automotive, this will wait and see. Again, we know we can produce those steels, and we're going to be delivered about how we think about doing that. Because again, we want to make the most money that we can possibly make for ourselves, customers, and our shareholders. So we're going to be really delivered and mindful.

Speaker Change #137: So.

Speaker Change #137: Our expectation is to double that volume in the next several years and so as you see West Virginia come online that is going to be a key focus for us how we think about how far upstream we go into that like the exposed automotive.

Speaker Change #137: We'll wait and see again, we know we can produce those steels that we're going to be deliberate about how we think about doing that because again, we want to make the most money that we can possibly make for our sales customers and our shareholders. So we're going to be really deliberate and mindful and not to get too over weighted to auto.

Leon J. Topalian: Because again, we want to make the most money that we can possibly make for ourselves, customers, and our shareholders. So we're going to be really deliberate and mindful, not to get too overweighted to the auto business but to be very deliberate about how we continue to move up in that value chain and the higher value products there. Electrical steals, look, I would tell you to stay tuned.

Leon Topalian: They not to get too overweighted to auto, but to be very delivered about how we continue to move up. And that value chain and the higher value products there for electrical steels.

Speaker Change #137: But to be very deliberate about how we continue to move up.

Speaker Change #137: And that value chain into higher value products there.

Leon Topalian: I would tell you to stay tuned. It's something that we've looked at. We, again, know that market. We don't lose in it. We know the imports that are coming in were being supplied, and the end uses that could be potentially attractive as we move forward. So it is new core continues to evaluate that we make no mistake. We've got some great partners. We've got some great. Relationships with those that are currently making it around the world that will continue to evaluate that and see if that fits where we want to go. And again, I would just tell you stay tuned in the coming months.

Patrick: Patrick I'll steels look I would tell you stay tuned it's something that we've looked at again no debt market, we know who's in it we know.

Leon J. Topalian: It's something that we've looked at. We, again, know that market. We know who's in it.

Leon J. Topalian: We know the imports that are coming in, where they're being supplied, and the end uses that could be potentially attractive as we move forward. So again, as Nucor continues to evaluate that, make no mistake. We've got some great partners. We've got some great relationships with those that are currently making it around the world, and we will continue to evaluate that and see if that fits where we want to go. And again, I would just tell you to stay tuned in the coming months. Okay, we'll do. Thanks, Leon and team. Thank you. Your next question comes from the line of Martin Englert from Seaport Research Partner. Your line is now open.

Patrick: The imports that are coming in where it's being supplied in the end uses that.

Patrick: Could be potentially attractive as we move forward. So as nucor continues to evaluate that.

Speaker Change #139: Make no mistake, we have got some great partners and we've got some great.

<unk>.

Speaker Change #139: Relationships with those that are currently making it around the world that will continue to evaluate that and see if that fits where we want to go and again I would just tell you stay tuned in the coming months.

Timna Tanners: Okay, well, do you think slam on team? Thank you.

Speaker Change #139: Okay, well, great Thanks, Dan and team.

Speaker Change #140: Thank you.

Speaker Change #139: Okay.

Martin Englert: Sir, the next question comes from the line of Martin Englert from C-Port Research Partner. Her line is now open.

Martin John Englert: Hi, thanks for the follow-up. I wanted to see if you could touch on how you source electricity for your steel mills and the typical duration for agreements, and how you might be thinking about protecting that cost if rates and the capability of what you have to pay for start to rise in the future. Yeah, Martin, look, I'm going to kick it off.

Speaker Change #141: Your next question comes from the line of Martin Englert from Seaport Research Partners. Your line is now open.

Martin Englert: All right, thanks to the follow-up.

Martin John Englert: Alright, thanks for the follow up wondering if you could touch on how you source of electricity for your steel mills.

Martin John Englert: I wanted a piece of touch on how you source electricity for your steel mills and the typical duration for agreements and how you might be thinking about protecting that cost if race and capability. What you have to pay to get that, start to rise in the future.

Speaker Change #142: The typical duration for agreement.

And how you might be thinking about protecting that cost.

Speaker Change #143: Rates and capability and what you have to pay to get now start to rise in the future.

Leon Topalian: Yeah, Martin, well, I'm going to kick it off, and I'm really glad you asked that. You know, over the last three or four years, and really since I took over as CEO, it's been something that we've talked about, and not just talked, we've actually taken meaningful steps. So, you saw a few years ago, our partnership with an investment in new scale, this small modular reactor in the advanced nuclear reactors that are getting built. Obviously, Bill Gates and Tara Power are doing their own SMRs, as well as two other manufacturers, so. From a new core perspective, we have a large power consumption that we look at where in, you know, 40 different states, we've got 30 EAS around the country that we need to build relationships with and you got to understand as well.

Leon J. Topalian: And I'm really glad you asked that, you know, over the last three or four years, and really, since I took over as CEO, it's been something that we've talked about. And not just talked; we've actually taken meaningful steps. So you saw a few years ago our partnership with an investment in NuScale, the small module reactor, and the advanced nuclear reactors that are getting built. Obviously, Bill Gates and TerraPower are doing their own SMRs. And as well as two other manufacturers. So, from a Nucor perspective, we have a large power consumption that we look at. We're in, you know, 40 different states.

Speaker Change #143: Yes, Martin look I'm going to kick it off and I'm really glad you asked that.

Speaker Change #144: Over the last three or four years and really since I took over as CEO. It's been something that we've talked about and not just talked we've actually take meaningful steps. So you saw a few years ago, our partnership with an investment in new scale. This small module reactor in the advanced nuclear reactors that are getting built.

Speaker Change #144: Obviously, bill gates in Terrapower doing their own <unk> and as well as to other manufacturers. So.

Speaker Change #144: From a new core perspective, we have a large power consumption that we look at we're in 40 different states. We've got 30 eas around the country that we need to build relationships.

Leon J. Topalian: We've got 30 EAFs around the country that we need to build relationships with. But you have to understand, as well, we've been doing this since 1968. We have incredible relationships with the utilities that we're in because we're the largest power consumer in many of those states. But the macro picture to what you're asking, as you think about the green and digital economies, you think about the data center infrastructure built out in the cloud computing that's got to be handled, that volume is insatiable.

Speaker Change #145: Got to understand as well we've been doing this since 1968, we have incredible relationships with the utilities that were in because we are the largest power consumer in many of those states but.

Leon Topalian: We've been doing this since 1968; we have incredible relationships with the utilities that we're in because we're the largest power consumer in many of those states. But the macro picture to what you're asking, as you think about the green and digital economies, you think about the data center infrastructure built out in the cloud computing that's got to be handled. That volume is insatiable, and so we as a nation have really got to think about how are we going to sell that energy need because almost everywhere they're looking. These data centers now are growing from, you know, 100 megawatts to 6, 7, 8, 900 megawatts in demand.

Speaker Change #145: Macro picture to what you are asking as you think about the green and digital economy. As you think about the data center infrastructure build out in the cloud computing, that's gotta be handle.

Speaker Change #145: That volume is insatiable and so we as a nation have really got to think about how are we going to sell that energy need because almost everywhere theyre looking these data centers now are growing from 100 megawatts to 678 900 megawatts.

Leon J. Topalian: And so we as a nation have really got to think about how we're going to solve that energy need. Because almost everywhere they're looking, these data centers now are growing from, you know, 100 megawatts to 6, 7, 8, 900 megawatts in demand. It's a huge, huge appetite.

Speaker Change #145: And demand, it's a huge huge appetite so youre going to see Nucor continued to.

Leon Topalian: It's a huge, huge appetite. So, you're going to see new core continued to look for opportunities to promote, invest in, or otherwise. Position ourselves for the long term so that not only do we get sure it is defined. At the right cost and again, many of our contracts are a long term pricing, so they're not, we're not going to the market daily or monthly. We don't have, you know, we will have four power rates versus variable, but, you know, we have a consistent pricing model that we're able to look out years and years into the future that will continue to.

Leon J. Topalian: So you're going to see Nucor continue to look for opportunities to promote, invest in, or otherwise position ourselves for the long term so that not only do we get certainty of supply at the right cost, but again, many of our contracts are for long-term pricing, so they're not, we're not going to the market daily or monthly. We don't have, you know, we'll have firm power rates versus variable, but, you know, we have a consistent pricing model that we're able to look out years and years into the future that will continue that.

Speaker Change #145: Look for opportunities to promote invest in or otherwise position ourselves for the long term so that not only do we get surety of supply.

Speaker Change #145: At the right cost and again many of our contracts are long term pricing. So they're not we're not going to the market daily or monthly we don't have.

Have firm power rates versus variable, but we have a consistent pricing model that we're able to look out years and years into the future that will continue that so again, it's a really important question for our nation should we think about manufacturing as well as the U S citizens and how theyre going to be able to afford.

Leon Topalian: So again, it's a really important question for our nation. So we think about manufacturing as well as the U.S.

Leon J. Topalian: So, again, it's a really important question for our nation as we think about manufacturing as well as U.S. citizens and how they're going to be able to afford energy in the years to come as we think about the current environment and the decommissioning of our existing coal plants. About 70% of them will be idled by 2030, so we've got to find, and I think we have to embrace as a nation nuclear energy as the cleanest, most reliable form of energy that's out there.

Leon Topalian: citizens and how they're going to be able to afford energy in the years to come as we think about the current environment in, you know, decommissioning of our existing coal plants. About 70% of them will be idle by 2030. So we've got to find, and I think we have to re-embrace, as a nation, nuclear energy. It is the cleanest, most reliable form of energy that's out there.

Speaker Change #145: <unk> in the years to come as we think about the current environment.

Speaker Change #145: Yes.

Speaker Change #145: The decommissioning of our existing coal plants about 70% of them will be idled by 2030. So we've got to find and I think we have to re embrace as a nation nuclear energy is the cleanest most reliable form of energy.

Stephen Laxton: But Steve, anything you'd want to add on kind of current climate and pricing and utilities. And I think just to build on what Leon said, a couple points of emphasis: you know, we're a multi-side location, so it's not specific to a particular delivery point. It's also the vast majority of our power is purchased under a tariff rate agreement.

Speaker Change #145: That's out there, but Steve anything you'd want to add on the current climate.

Leon J. Topalian: But, Steve, anything you'd want to add on kind of current climate and pricing and utilities? Yeah, Mark, I think just to build on what Leon said, a couple points of emphasis, you know, we're a multi-site location, so it's not specific to a particular delivery point. It's also the vast majority of our power is purchased under a tariff rate agreement, and so those fluctuations tend to change slowly over time, but Leon highlighted really the more fundamental long-term importance of the company or as a country, and we've, of course, you're familiar that we've put in place some purchase power agreements and we've taken some proactive steps to partner with, ironically, I shouldn't say ironically, but folks out of our sector, some technology companies on procurement, and work with utilities closely on the development of their plans.

Stephen D. Laxton: Pricing in the utilities.

Stephen D. Laxton: Alright, I think just to build on what Leon said, a couple of points of emphasis where multi site locations. So it's not specific to a particular delivery point. It's also.

Stephen D. Laxton: The vast majority of our power has purchased under a tariff rate agreement.

Stephen Laxton: And so those fluctuations tend to change slowly over time, but that Leon, Leon highlighted really the more fundamental long-term importance of the company at our as a country and down, that we've, of course, you're familiar that we put in place and purchased power agreements and we've taken some proactive steps to partner with. Ironically, I shouldn't say ironically with the folk out of our sector; some technology companies, some procurement, and work with utilities closely on the development of their plans. So I'd say that we're very front-footed on this issue. The energy is about it's a little less than $40 a ton cost last quarter, roughly give or take about 80% of that as electricity based.

Stephen D. Laxton: No.

Speaker Change #147: Fluctuations tend to change slowly over time.

Leon J. Topalian: Leon Leon highlighted really the more fundamental long term importance of the company.

Leon: As a country.

Speaker Change #148: Of course, you are familiar.

Speaker Change #149: Put in place some purchase power agreements and we've taken some proactive steps to partner with.

Speaker Change #150: Ironically, I shouldn't say ironically.

Speaker Change #150: Folks out of our sector some technology companies on procurement.

Speaker Change #150: And worked with utilities closely on the development of their plan. So I would say that we're very front footed on this issue.

Leon J. Topalian: So I'd say that we're very front-footed on this issue. Energy is about, it's a little less than $40 a ton cost last quarter. Roughly, give or take about 80% of that is electricity-based, so it is a meaningful part of our overall Thank you. I understand there are a lot of facilities, but is there an average duration or goalposts, whether that's five years or ten years under contract for the EAS? Martin, I would tell you that that does vary. I'm not sure I've got a great average answer for you across the spectrum.

Speaker Change #150: Energy is about just a little less than $40 a ton cost last quarter, roughly give or take about 80% of that is electricity based so.

Stephen Laxton: So it is a meaningful part of our overall cost.

Speaker Change #150: So it is a meaningful part of our overall costs.

Martin Englert: Thank you.

Stephen Laxton: I understand there's a lot, a lot of facilities, but is there an average duration or goalpost, whether that's five years or ten years under contract for the year? I'm not sure I've got a great average answer for you across the spectrum. What I would tell you is, in most of those cases, there are multi-multi-year contracts that we're signing with the utilities, so they're now one to two years or five, eight, ten-year type contracts. So all of those could be at different positions of where we sit in 2024, obviously, because of the timing and when those plans came online.

Speaker Change #150: Yes.

Speaker Change #151: I understand there's a lot of facilities, but is there an average duration.

Our goalpost, whether that's five years or 10 years under contract.

Speaker Change #152: For the year.

Martin John Englert: Martin I would tell you that that does vary I'm not sure I have got a great average answer for you across the spectrum, what I would tell you is and most most of those cases, they're multi multiyear contracts that we're signing with the utilities, So theyre not one to two years or.

Steve: What I would tell you is, in most of those cases, they're multi-multi-year contracts that we're signing with the utilities. So they're not one to two years; they're five, eight, ten-year type contracts. So all of those could be at different positions as to where we sit in 2024, obviously, because of the timing and when those plans come online. So again, from the macro, it is a long-term contract is the way you could think about that.

Martin John Englert: A 10 year type contracts. So all of those could be a different positions of where we sit in 2024, obviously because of the timing and when those plants came online. So again from the macro it is a long term contract is the way you can think about that.

Stephen Laxton: So, again, from the macro, it is a long-term contract as the way you could think about that.

Martin Englert: You touched on this or alluded to this to some degree in your answer, but do you have concerns that higher electricity rates might stime some of the reshoring activity and potentially disadvantage some of the US manufacturing base given US has been more so an ideal market, at least from a cost of energy or electricity perspective historically. Versus some others, go boy.

Steve: If you touch on this or alluded to this to some degree in your answer, but do you have concerns that higher electricity rates might stymie some of the reshoring activity and potentially disadvantage some of the U.S. manufacturing base given the U.S. has been, more so an ideal market, at least from a cost of energy or electricity perspective, historically, versus some others globally?

Speaker Change #153: You touched on this or alluded to this to some degree in your answer but do you have concerns.

Mike: Electricity rates Mike.

Speaker Change #155: <unk> some of the re shoring activity.

Speaker Change #156: Potentially disadvantage some of the U S manufacturing base given U S has been.

Speaker Change #157: More so an ideal market.

Speaker Change #158: At least from a cost of energy or electricity perspective, historically versus some others globally.

Martin John Englert: You know, short answer, Martin? Yes, I do. You know, I think if you look today...

Leon Topalian: A short answer, Martin? Yes, I do. I think if you look today, the US is building no nuclear power right now. In China, they're building 27 facilities. And so, I am absolutely because, again, we're talking, we're in use customers. We're talking to some of the biggest companies in the country and the partnerships that we have with them. And they are looking out five, eight, ten years, and they know they can't get the power today. And so, there are absolutely cases where we know projects are moving forward because they can't meet the power requirements. So, yes, is the short answer to that question of, it's an issue that has got to be dealt with because it's sitting right in our front door.

Short answer Martin, Yes, I do.

Speaker Change #158: I think if you look today the.

Leon J. Topalian: The U.S. is building no nuclear power plants. Right now, in China, they're building 27 facilities. And so I am absolutely because again, we're talking to customers, we're talking to some of the biggest companies in the country and the partnerships that we have with them, and they are looking out five, eight, ten years, and they know they can't get the power today. And so there are absolutely cases where we know projects aren't moving forward because they can't meet the power requirements.

Speaker Change #158: The U S is building no nuclear power.

Speaker Change #159: Right now in China, They're building 27 facilities and so.

Speaker Change #160: Absolutely because again, we're talking where end use customers, who we're talking to some of the biggest companies in the country and the partnerships that we have with them and they are.

Speaker Change #160: Looking out 510 years and they know they can get the power today and so there are absolutely cases, where we know projects are moving forward because they can't meet the power requirements. So yes is the short answer to that question of.

Leon J. Topalian: So yes is the short answer to that question of it's an issue that has got to be dealt with because it's sitting right at our front door. And again, we have an opportunity to embrace that and think about how we, again, as a superpower in the world, how we continue to proliferate manufacturing, support manufacturing, and again, the overall economy through our energy independence. Okay. I appreciate all the color and commentary.

Speaker Change #160: It's an issue that has got to be dealt with because it's sitting right at our front door and again, we have an opportunity to embrace add into to think about how we.

Leon Topalian: And again, we have an opportunity to embrace that and to think about how we, again, as a superpower in the world, how we continue to proliferate manufacturing, support manufacturing, and again, the overall economy through our energy independence.

Speaker Change #160: Ken.

Speaker Change #160: Superpower in the World, how we continue to proliferate manufacturing support manufacturing and again, the overall economy through our energy independence.

Martin Englert: Okay, I appreciate all the comments here. Thank you.

Speaker Change #161: Okay I appreciate all the color and commentary thank you.

Martin Englert: Thank you, Martin.

Martin John Englert: Thank you Martin.

Leon J. Topalian: Thank you. Thank you, Martin. I would now like to turn the call over to Leon Topalian, Chair, President, and CEO. Thank you. And once again, I'd like to thank our Nucor team for an outstanding first half performance and safety. Thank you for your efforts and your dedication to one another in helping us to achieve our goal of becoming the world's safest steel company. I'd also like to thank our customers for giving us the opportunity to serve you each and every day.

Leon J. Topalian: I would now like to turn the call to Lee and to Paulian, Chair, President and CEO. Thank you. And once again, I'd like to thank our new core team for an outstanding first half performance and safety. Thank you for your efforts, your dedication to one another in helping us to achieve our goal of becoming the world's safest steel company. I'd also like to thank our customers for giving us the opportunity to serve you each and every day. And finally, thank you to our investors for trusting us with your valuable shareholder capital. Thank you for your interest in new core and have a great day.

Speaker Change #162: I would now like to turn the call to <unk> Chair President and CEO.

Speaker Change #163: Thank you and once again I'd like to thank our <unk> team for an outstanding first half performance and safety. Thank you for your efforts your dedication to one another and helping us to achieve our goal of becoming the world's safest steel company I'd also like to thank our customers for giving us the opportunity to serve you each and every day.

Leon J. Topalian: And finally, thank you to our investors for trusting us with your valuable shareholder capital. Thank you for your interest in Nucor, and have a great day. This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change #163: Finally, thank you to our investors for trusting us with your valuable shareholder capital. Thank you for your interest in Nucor and have a great day.

This concludes today's conference call. Thank you for your participation. You may now disconnect.

Speaker Change #164: This concludes today's conference call. Thank you for your participation you may now disconnect.