Andrew Jones

Andrew Jones from UBS questioned Nucor's pricing policy, considering the widening gap between U.S. and East Asian HRC prices, potential risks of increased imports, and implications for future price increases. Jones also asked about the lower 2026 CapEx guidance, seeking clarification on whether it reflected reduced project costs or timing differences. Finally, he inquired about Nucor's interest in upstream steel M&A versus a continued focus on downstream areas.

Answer

Chair and CEO Leon Topalian attributed U.S. pricing strength to robust domestic demand and a healthy economy, not solely tariffs, and expressed optimism for 2026. President, COO, and CFO Steve Laxton clarified that the lower 2026 CapEx guidance was primarily a timing difference, with significant spending advanced into 2025, rather than a cost reduction. Leon Topalian confirmed Nucor's interest in all M&A opportunities, including upstream steel, as the largest producer in the Western Hemisphere, while also continuing to grow through adjacencies.

Andrew Jones questioned Nucor's pricing policy given the growing gap between U.S. HRC and East Asian import parity, the risk of increased import volumes, and its potential impact on future price increases. He also asked about the reason for the lower 2026 CapEx guide and Nucor's interest in upstream steel M&A versus downstream.

Answer

Chair and CEO Leon Topalian explained that U.S. pricing is dictated by demand and supply, not solely tariffs, attributing the U.S. market's separation from world pricing to a robust U.S. economy, reshoring, and investments. He anticipates 2026 will be a very solid year. President, COO, and CFO Steve Laxton clarified that the lower 2026 CapEx guide is due to higher spending in 2025 ($3.4 billion vs. ~3 billion guided), indicating projects advanced faster, rather than a reduction in cost or substantial overspill into 2027. Leon confirmed Nucor, as the largest producer in the Western Hemisphere, is interested in all M&A opportunities, including upstream steel, as steel capabilities fuel all growth.

Andrew Jones inquired about Nucor's stance on the aborted MBQ price hike by peers, the current state and pricing outlook for the plate market, and Nucor's focus on military and export markets for higher-quality plate grades.

Answer

Randy Spicer (VP, Bar Products) did not comment on specific pricing actions but noted strong momentum, robust order entry, and meaningful price increases realized in merchant bar in 2025. Brad True (General Manager, Nucor Corporation) described a good plate market with EDC up 15% year-over-year, positive impact from tariffs, and strong demand from energy and infrastructure, with backlogs up 58% year-over-year. He also highlighted Brandenburg's EBITDA positive results, X70 API grade qualification, and early success in military armor trials, positioning Nucor as a premier supplier for U.S. military and global defense spending.

Andrew Jones sought a better understanding of the barriers to entry in the precast business, which he noted appears fragmented. He asked for quantification of capital costs and insights into the complexity or 'steep learning curve' mentioned, given that fragmented markets typically imply lower margins than observed.

Answer

SVP and CFO Paul Lawrence explained that key drivers for success in the precast business include strong customer relationships, a solid reputation for on-time delivery and quality, and broad-based precast capabilities. He noted that while basic precast entry is easy, complicated job sites require diverse forms, giving companies like CPMP and Foley a differentiating capability. He also highlighted that scale helps on larger jobs by ensuring material availability, which is a significant advantage for contractors who prioritize speed.

Andrew Jones asked about long-term demand risks from trade policy, the market's ability to absorb new capacity from competitors, the near-term market balance over the next year, and regional pricing variations in the rebar market.

Answer

Executive Peter Matt expressed confidence that long-term demand from infrastructure and reshoring will absorb new capacity, which he noted will take time to ramp up and is not a major issue for 2025. He expects the market to remain balanced, supporting margins. He acknowledged normal regional pricing variations but stated that broad-based demand is enabling price increases across all markets.

Andrew Jones questioned the company's thinking on leverage and large-scale M&A with net debt above $8 billion. He also asked for the cash payment schedule for the Votorantim settlement.

Answer

EVP & CFO Genuino Christino expressed comfort with the current capital structure, highlighting a recent S&P upgrade and the significant EBITDA being added from new projects and M&A. He stated the focus is on organic growth and reiterated no plans to increase their Vallourec stake. The Votorantim settlement of $500 million will be paid in installments over three years.

Andrew Jones of UBS Group inquired about ArcelorMittal's approach to leverage and large-scale M&A with net debt above $8 billion. He also asked for the cash payment schedule for the Votorantim settlement.

Answer

EVP & CFO Genuino Christino expressed comfort with the company's capital structure, citing a recent S&P credit rating upgrade and the additional EBITDA from recent investments. He stated the Votorantim settlement of $500 million will be paid in cash installments over three years. He also reiterated that the company has no plans to increase its stake in Vallourec.

Andrew Jones from UBS asked what tangible actions the EU's steel action plan could deliver to address high energy costs. He followed up by questioning if a model where energy-intensive iron-making is done outside of Europe, where power is cheaper, would make more sense for the company.

Answer

Group CFO Genuino Christino responded that the steel action plan can address unfair competition from high imports and high CO2 costs paid by domestic mills. He mentioned that governments can use tools like contracts for difference and facilitating PPAs to provide competitive energy prices. He acknowledged that deciding whether to produce in or out of Europe is an option ArcelorMittal is well-positioned to consider, citing its DRI plant in Texas as an example, but said it's too early to make that call.

Andrew Jones requested quantification of steel volume flows from Mexico and Canada into the U.S. and asked about the market dynamics for non-grain-oriented (NGO) electrical steel.

Answer

CEO Aditya Mittal described the NGO electrical steel market as being in a deficit, with significant import volumes that ArcelorMittal's new 150,000-tonne facility aims to capture. He highlighted growing demand from both electric and hybrid vehicles. CFO Genuino Christino declined to provide specific cross-border volume data but reiterated that the cost impact of potential tariffs would be similar to the previously disclosed $100 million per quarter figure from 2018.

Andrew Jones followed up on the European market outlook, asking about ArcelorMittal's planned maintenance schedule for the coming months and at what point market conditions would need to deteriorate for the company to consider closing blast furnace capacity.

Answer

Group CFO Genuino Christino stated that the company is currently running all but one furnace and that order books appear stable with normal seasonality expected. He emphasized ArcelorMittal's flexibility to adjust production by idling furnaces if demand weakens, but noted that they do not see a need for such actions at the present time.

Andrew Jones from UBS Group AG inquired about the fabrication business's ability to pass on higher steel costs, sought a ballpark for Sinton's Q2 utilization or value-add mix, and asked what the aluminum business's EBITDA would be at current spot prices.

Answer

CFO Theresa Wagler noted that while substrate costs rise, the primary driver for fabrication profitability is volume. She did not provide a specific utilization for Sinton but pointed to coated volume trends as an indicator of growth potential. She declined to provide a spot-based EBITDA for the aluminum project, reiterating the company's focus on through-cycle returns.

Andrew Jones of UBS asked for a specific figure on pig iron consumption for 2024 or 2025 and questioned if the Q1 working capital build was solely due to pricing changes.

Answer

President & COO Barry Schneider explained that pig iron consumption is a dynamic decision, varying from 8% to 25% based on monthly economics, and declined to give a specific target. EVP & CFO Theresa Wagler clarified the working capital build was modest at around $100 million (excluding a recurring profit-sharing payment) and was primarily driven by higher steel prices rather than a significant inventory build.

Andrew Jones from UBS posed a question about a pessimistic 2025 market scenario, asking how Steel Dynamics would react to weak demand and new competitive supply to help balance the market.

Answer

CEO Mark Millett dismissed the pessimistic premise, stating they are constructive on 2025. He emphasized that the company's resilient business model, built on a diversified value-add product mix and significant internal pull-through demand of over 2 million tons, allows them to maintain superior through-cycle utilization rates regardless of market conditions. He confirmed there are no plans to close any lines.

Asked about the company's export strategy in light of recent tariff changes in the US and EU, and questioned if lower raw material costs could lead to an upside surprise for Q2 EBITDA.

Answer

The executive highlighted opportunities in both US and EU markets due to recent tariff and quota changes. They explained that while prices might be slightly higher in Q2, additional costs from new investments will offset potential gains, leading to a similar EBITDA level as Q1.

Andrew Jones of UBS asked about the company's export strategy in light of tightening EU restrictions and existing U.S. tariffs, questioning if the sales focus would shift. He also inquired if lower raw material costs could create an upside risk to the Q2 EBITDA forecast.

Answer

Executive Idil Onay explained that Q1 had a record export share and the company sees opportunities in both the U.S. and EU markets due to recent tariff changes and its large quota position. Regarding Q2 EBITDA, she noted that while sales prices might be slightly higher, additional costs from commissioning new investments would likely result in a similar EBITDA level to Q1.

Andrew Jones from UBS questioned how the company's export strategy is evolving amid tightening EU import restrictions and ongoing US tariffs, and asked if raw material cost relief could lead to upside risk for the Q2 EBITDA guidance.

Answer

Executive Idil Onay highlighted that Q1 saw the company's highest-ever export share. She sees opportunities in both the US market, due to the removal of tariff exemptions for other countries, and the EU, where the company holds the largest quota. Regarding Q2 EBITDA, Onay explained that while sales prices might be slightly higher, the overall EBITDA will be similar to Q1 due to additional costs from commissioning two new investments, which will offset any potential tailwinds from raw material costs.