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# Nucor Corporation (NUE) — Narrative, FY26Q2 Nucor reports on a calendar fiscal year; its fiscal quarters are 13-week periods. The second quarter of 2026 ended July 4, 2026 (prior-year quarter ended July 5, 2025). All amounts are in US dollars as reported. ## Business *Source: FY2025 Form 10-K (fiscal year ended December 31, 2025), accession 0001193125-26-071575, Item 1, Item 2 and Note 22.* Nucor makes steel and steel products, mainly in North America, and sells them mainly to steel service centers, fabricators and manufacturers across the United States, Canada and Mexico. It is the continent's largest recycler: its mills melt scrap (about 20 million gross tons in 2025) in electric arc furnaces (EAFs), which is 100% of its steelmaking. Revenue is earned by shipping tons, so results move with two variables management tracks above all others: average selling price per ton and tons shipped to outside customers. Nonresidential construction is the largest end market; no single customer exceeded about 5% of 2025 sales. In 2025 net sales to external customers were $32.49 billion, split across three segments: - **Steel mills ($20.00 billion of 2025 external sales, 62%).** Sheet (hot-rolled, cold-rolled, galvanized; six mills, about 14.5 million tons of capacity, including 51%-owned California Steel Industries), bar (15 mills, about 9.8 million tons, including rebar micro mills and special-bar-quality mills), structural (two mills, about 3.3 million tons, including 51%-owned Nucor-Yamato, North America's only producer of high-strength low-alloy beams) and plate (three mills, about 3.6 million tons). The segment also holds 51% of a galvanizing joint venture in Mexico with JFE Steel and a 50% equity stake in NuMit, owner of the Steel Technologies sheet processor. About 85% of 2025 sheet sales were under contracts of six to 12 months that reprice monthly or quarterly against market indices or raw-material costs; most bar, structural and plate tonnage sells at spot prices. In 2025, 79% of mill shipments went to outside customers and 21% to Nucor's own steel products businesses. - **Steel products ($10.33 billion).** Downstream fabricated goods aimed at nonresidential construction and infrastructure: Vulcraft/Verco joists, joist girders and deck (the leading U.S. producer); tubular products (HSS tubing, electrical conduit, solar torque tubes); rebar fabrication and installation (nearly 70 facilities); pre-engineered metal buildings; insulated metal panels (CENTRIA, Metl-Span); warehouse and data-center racking; overhead doors (C.H.I. and Rytec); utility towers and structures; Skyline Steel piling; cold finished bar; wire, mesh and fasteners. Joist, deck and rebar work is largely fixed-price, competitively bid contract business. - **Raw materials ($2.16 billion).** The David J. Joseph Company (DJJ) brokers and processes ferrous and non-ferrous scrap (about 95% of the segment's outside sales came from brokerage in 2025); two direct reduced iron (DRI) plants in Trinidad and Louisiana supplied about 3.3 million metric tons of DRI to the mills in 2025; plus natural gas wells in Colorado and an industrial gas business. Roughly 93% of the metal it handles is consumed by Nucor's own mills. Strategy is framed as "Grow the Core, Expand Beyond and Live Our Culture": investing in higher value-added mill products and in downstream businesses (racking, doors, panels, towers) that management expects to raise margins and reduce earnings volatility. Investment totaled about $9.73 billion over 2023–2025, roughly 91% capital spending and the rest acquisitions. The largest project is a 3-million-ton sheet mill in Mason County, West Virginia, estimated to cost about $4 billion (about $3.65 billion net of a $350 million state commitment). The company states a capital-return target of at least 40% of net earnings over time through dividends and buybacks; it has raised its base dividend every year since 1973. The cost structure is deliberately variable. Scrap and scrap substitutes are the largest cost (about 1.1 tons per ton of steel; $392 per gross ton on average in 2025), and production workers earn a large share of pay through weekly production incentives and profit sharing (historically 10% of pre-tax earnings for most non-officer staff), so payroll falls when output and profit do. Nucor employs about 33,000 teammates, mostly non-union and U.S.-based. Year-end 2025 order backlogs were about $3.35 billion in steel mills (from $2.13 billion a year earlier) and $4.46 billion in steel products (from $4.02 billion). ## Risk factors *Source: FY2025 Form 10-K, accession 0001193125-26-071575, Item 1A. The Q2 2026 10-Q (accession 0001193125-26-345891) reports no material changes to these risk factors.* The risks that bear most directly on earnings: - **Global overcapacity and imports.** The OECD estimates 2025 global steel overcapacity at about 704 million net tons, eight times U.S. annual production, possibly rising to about 795 million tons by 2027. China has produced more than one billion tons for eight straight years and exported a record 131 million tons in 2025, and Chinese producers are building capacity in Southeast Asia and Africa to sidestep duties. Nucor's pricing currently benefits from Section 232 tariffs, fully reinstated in 2025 without exemptions and broadened to about 600 fabricated products, and from 142 antidumping/countervailing duty orders on its core products. If those protections are relaxed or a strong dollar draws in imports, U.S. prices could fall. - **Cyclicality.** Demand tracks construction, energy, service centers, appliances and autos. A downturn, especially in nonresidential construction, hits a capital-intensive business hard. - **Scrap and raw-material prices.** Scrap and substitutes (pig iron, DRI, iron ore pellets) are volatile and partly imported from politically unstable regions. When orders are priced before inputs are bought, rising costs compress margins, and contract sheet prices adjust only with a lag. Some exporting countries restrict scrap exports, giving their own producers a cost advantage. - **Energy.** EAF mills consume large amounts of electricity and the DRI plants consume natural gas. Price spikes, supply disruptions or grid decarbonization that raises power costs or reduces reliability may not be recoverable in selling prices. - **Capital intensity.** Capital spending totaled about $8.90 billion over 2023–2025. Funding relies on operating cash, commercial paper, bond issuance and a $2.25 billion revolver, and acquisitions, higher rates or unforeseen events could require outside financing. - **Carbon and environmental regulation.** Uncertain climate policy is the largest environmental risk the company names. Tighter air-quality standards could delay mill permits and expansions, and environmental product declaration rules (for example the Buy Clean California Act) add cost and may favor foreign producers unless applied evenly. - **Operational and other risks.** Explosions, fires, equipment failures and natural disasters (property insurance is substantially self-insured); cybersecurity attacks on production and IT systems; integration of acquired businesses; operations in Canada, Mexico, Trinidad and other markets; possible impairment of goodwill, long-lived assets or equity investments (the 2025 goodwill test found no impairment, but management notes that the performance of certain businesses within its reporting units requires continued improvement; separately, the Q2 2026 10-Q reports that the Mexican galvanizing joint venture had an impairment triggering event in Q4 2025 that required no charge); changes in U.S. tax law; and legal and compliance proceedings, including an EPA Clean Air Act matter at the Louisiana DRI plant that is being settled and that Nucor does not expect to be material. ## Management's discussion — fiscal 2025 *Source: FY2025 Form 10-K, accession 0001193125-26-071575, Item 7 and Item 7A.* 2025 combined stronger steel mill volumes with a weaker downstream business. Steel mill operating rates rose to 83% from 76% in 2024 as domestic demand grew modestly and imports fell (finished imports down 17.4%, to about 18% of U.S. demand). Infrastructure, data centers, energy and advanced manufacturing were strong; autos and residential construction were soft. - **Results.** Net sales rose 6% to $32.49 billion: tons shipped to outside customers rose 7% to 26.6 million, while the average price per ton slipped 2% to $1,221. Net earnings attributable to Nucor fell to $1.74 billion ($7.52 per diluted share) from $2.03 billion ($8.46). Gross margin was $3.85 billion (12%), down from $4.10 billion (13%). Return on average equity was 8.5% (9.8% in 2024). - **Segments (pre-tax earnings).** Steel mills rose to $2.38 billion from $2.23 billion on higher volumes and metal margins, ending the year with historically high backlogs. Steel products fell to $1.23 billion from $1.60 billion despite 9% higher volume, as the average price per ton dropped 6% (to $2,348) and margins compressed in joist and deck, metal buildings and rebar fabrication. Raw materials rose to $153 million from $40 million, mostly because 2024 included an $83 million write-off of a note receivable, with stronger DRI and brokerage results and Q4 insurance recoveries adding to the gain. Corporate/eliminations cost $1.20 billion. - **Costs.** Pre-operating and start-up costs were about $496 million (from $594 million), mainly for the Kentucky plate mill, the West Virginia sheet mill and the Arizona melt shop. Losses and impairments were $67 million, mostly facility closures or repurposing. The effective tax rate was 20.64%. - **Cash and capital.** Operating cash flow was $3.23 billion (from $3.98 billion), reduced by working-capital build in receivables and inventory. Capital spending rose to $3.42 billion, so free cash flow was slightly negative. Nucor bought back $700 million of stock (from $2.22 billion) and paid $512 million in dividends. It issued $1.0 billion of 2030 and 2035 notes in March 2025 to refinance $1.0 billion of 2025 maturities, enlarged its revolver to $2.25 billion (maturing March 2030), and issued $220 million of 40-year West Virginia industrial revenue bonds for the new sheet mill. Year-end cash and short-term investments were $2.70 billion (from $4.14 billion), funded debt to total capital was 24.4%, and credit ratings were A-/A-/A3, the highest among North American steelmakers. - **Guidance given with the 10-K.** Management guided to higher Q1 2026 earnings in all three segments (mills on higher volumes and prices) and to 2026 capital spending of about $2.5 billion, led by the West Virginia sheet mill, new Towers & Structures plants and a galvanizing line in South Carolina. ## Current quarter — Q2 2026 (13 weeks ended July 4, 2026) *Sources: Q2 2026 Form 10-Q, accession 0001193125-26-345891 (Item 1 notes, Item 2 MD&A, Part II Item 2); Q2 2026 earnings release and earnings-call presentation furnished on Form 8-K dated July 27, 2026, accession 0001193125-26-318190 (Exhibits 99.1 and 99.2).* The steel mills drove the quarter. Higher prices, a second consecutive quarterly record for mill shipments and wider metal margins nearly doubled earnings from a year earlier, while the downstream steel products segment earned less despite higher volumes. - **Headline results.** Net sales rose 23% to $10.40 billion (from $8.46 billion). The average price per ton was up 10% to $1,367 and outside shipments up 12% to about 7.6 million tons. Net earnings attributable to Nucor were $1.16 billion, or $5.04 per diluted share (from $603 million, $2.60). Gross margin was $2.03 billion (20%) against $1.22 billion (14%). The company's non-GAAP adjusted figure removes a $61 million pre-tax ($46 million after-tax) non-cash gain on its investment in Helion, a fusion energy company, after a Helion financing round; that gain was booked as a reduction of administrative expense. Adjusted earnings were therefore lower than reported, at $1.11 billion or $4.84 per share. EBITDA was $2.02 billion. - **Steel mills.** Pre-tax earnings were $1.56 billion (from $843 million). Outside shipments rose 12% to 5.66 million tons and the average price 10% to $1,145 per ton, while scrap cost rose 5% to $422 per gross ton. The segment also benefited from a $130 million reduction in cost of products sold for cash refunds of prior periods' raw-material procurement costs, which the company does not expect to recur materially in Q3. Utilization was 91% in the quarter and 88% for the first half (82% in the first half of 2025). Total plate shipments rose 25% year over year and sheet 8%. Backlogs were higher than at the end of Q1; the call presentation puts mill backlog up 18% sequentially. - **Steel products.** Pre-tax earnings fell to $353 million from $392 million. Volume rose 13% and the average price 4% (to $2,415 per ton), but higher steel input costs compressed margins. Tubular products led growth, with shipments up 39% and sales up to $599 million from $380 million, while joist and deck shipments fell 9% and sales to $483 million from $564 million. The segment backlog also rose sequentially. - **Raw materials.** Pre-tax earnings were $146 million (from $57 million) on higher prices and shipments and better DRI profitability. - **Other items.** Corporate/eliminations cost $430 million (from $393 million), a figure that already includes the $61 million Helion gain; profit-sharing and other incentive compensation rose $86 million year over year with profitability. Pre-operating and start-up costs were about $120 million, mainly for the West Virginia sheet mill and a new coating complex at the Indiana sheet mill. The effective tax rate was 21.2%. - **First half 2026.** Net sales were $19.89 billion (up 22%) and net earnings attributable to Nucor $1.90 billion, or $8.27 per diluted share (from $759 million, $3.26). Annualized return on average equity was 17.6%. Operating cash flow was $2.29 billion (from $1.10 billion) despite a $560 million inventory build. Capital spending fell to $1.23 billion from $1.81 billion. Nucor repurchased $475 million of stock (2.2 million shares) and paid $258 million in dividends. - **Balance sheet.** At July 4, 2026, cash and short-term investments were $2.69 billion, of which about $843 million was held by majority-owned joint ventures. The revolver was undrawn and funded debt to total capital was 23.4%. The current ratio fell to 2.5 from 2.9 at year-end because $500 million of 4.300% notes due 2027 moved into current liabilities. - **Capital return.** In Q2, Nucor bought about 1.5 million shares at an average of about $229 and returned about $479 million to stockholders including dividends; about $3.62 billion remained under the current buyback authorization at quarter end. - **Projects.** The company describes the West Virginia sheet mill as on time and on budget, with equipment commissioning through 2026, production beginning in 2027 and a multi-phase ramp through 2027 and 2028. A second galvanizing line (about 500,000 tons a year) at the Berkeley County, South Carolina sheet mill is commissioning equipment, with production start-up expected in the fall of 2026. Of the two new Towers & Structures plants, Indiana made its first galvanizing run in Q2 2026 with full production expected by Q3 2026, and Utah is expected to make its first run by year-end 2026 and reach full production by mid-2027. The Lexington, North Carolina rebar micro mill and the Kingman, Arizona melt shop were EBITDA-positive in Q2. Full-year 2026 capital spending is still estimated at about $2.50 billion, against $3.42 billion in 2025. - **Trade backdrop.** Management attributes part of the strength to federal trade policy, with antidumping and countervailing duties plus Section 232 tariffs continuing to curb unfairly traded imports. The call presentation shows finished-steel import market share of about 16% in the first half of 2026, against 21% in 2025 and 23% in 2024, but notes that Q2 imports were higher than Q1, with beam and rebar imports up in the half. **Outlook (Q3 2026 versus Q2).** Management expects higher consolidated earnings. In steel mills it expects higher realized prices across all major products on stable volumes, partly offset by higher conversion costs and no further material benefit from raw-material refunds. In steel products it expects higher volumes and prices. Raw materials earnings are expected to fall on lower scrap prices and higher pellet costs. Corporate results will lack the Q2 Helion gain. The expected full-year 2026 effective tax rate is 20.0% to 22.0%. ## Subsequent events *Sources: Q2 2026 Form 10-Q, accession 0001193125-26-345891 (filed August 12, 2026); Form 8-K dated July 27, 2026, accession 0001193125-26-318190.* The Q2 2026 10-Q, filed August 12, 2026, has no subsequent-events note and reports no acquisition, divestiture, debt issuance, borrowing or litigation outcome after the July 4, 2026 quarter end. The only legal matter it describes, the EPA Clean Air Act settlement talks at Nucor Steel Louisiana, was still under negotiation and is not expected to be material. Items the filings date after the quarter end: - **July 27, 2026:** Nucor released second-quarter results and its Q3 2026 outlook (described above). - **August 11, 2026:** payment date of the quarterly dividend declared in June 2026.