Nucor Corporation

Nucor Corporation is the largest and most diversified steel producer in North America and, according to its annual report, the continent's largest recycler: in 2025 it recycled approximately 20 million tons of scrap steel. The company was incorporated in Delaware in 1958, is headquartered in Charlotte, North Carolina, and employs about 33,000 people, the vast majority of whom are not unionized. Its shares trade on the New York Stock Exchange under the symbol NUE.

What separates Nucor from the legacy steelmakers is its production method. It does not run blast furnaces fed with iron ore and coking coal; it runs electric arc furnaces that melt scrap and scrap substitutes. The economic meaning, as the company describes it: a largely variable cost structure, lower capital intensity per ton of capacity, and the ability to match production to demand within a short time. Employee pay is built the same way — a substantial part is tied to production and profit and contracts on its own in weak years.

The company reports three segments. Steel mills — 62% of external sales in 2025 — comprise 15 bar mills, six sheet mills, two structural mills and three plate mills, with total capacity of about 31 million tons a year. Steel products is the downstream segment: joists and deck (Vulcraft/Verco), structural tubing and electrical conduit, fabricated and installed rebar, pre-engineered metal buildings (Nucor Building Systems, American Buildings, Kirby), insulated metal panels (CENTRIA, Metl-Span), warehouse racking and data-center infrastructure, commercial and residential doors (C.H.I., Rytec) and utility towers. Raw materials includes The David J. Joseph Company (DJJ), North America's leading ferrous scrap broker and processor, two direct reduced iron (DRI) plants in Trinidad and Louisiana, and natural gas properties in Colorado.

The three segments are chained together: about 93% of the material the raw materials segment brokers and processes is consumed in Nucor's own mills, and about 20% of mill shipments go to the steel products segment. This chaining has an accounting consequence that recurs throughout the review: a rise in the steel price benefits the mills segment and raises the input cost of the products segment.

The company consolidates three joint ventures in which it holds 51%: Nucor-Yamato Steel in Arkansas (the only North American producer of high-strength, low-alloy beams), California Steel Industries, and Nucor-JFE Steel Mexico. The company has no controlling shareholder. The most recent quarterly dividend was the 213th in a row, and the base dividend has been raised every year since 1973. The credit rating — A-/A-/A3 — is, according to the company, the highest of any steel producer headquartered in North America.

The second quarter of 2026 was Nucor's strongest quarter since 2023: net sales of $10.40 billion, up 23% year on year, and diluted earnings per share of $5.04 against $2.60. Both drivers moved the same way — average price per ton rose 10% and volume rose 12%. Steel mill shipments of 7.1 million tons were a second consecutive quarterly record, and utilization rose to 91%.

Two non-recurring items — and only one was removed from "adjusted" earnings

Alongside reported earnings ($5.04 per share), the earnings release presents adjusted earnings of $4.84. The only adjustment made is the removal of $61 million, a non-cash increase in the carrying value of the investment in Helion, a fusion energy company that completed a financing round in the quarter. The amount was recorded as a reduction of administrative expenses.

The quarterly report describes a second item: a $130 million reduction of cost of products sold in the steel mills segment, "related to cash refunds associated with prior periods' raw materials procurement costs". This item was not removed from adjusted earnings, even though the company's own presentation states, regarding the third quarter, that no further material benefit from raw material refunds is anticipated. The report does not specify the source of the refund.

The right-hand column was computed by us: the items were removed at the pre-tax level; the employee profit-sharing accrual, which has consistently run at about 9% of earnings, was adjusted accordingly; and the quarter's effective tax rate (21.2%) was applied to the result. The noncontrolling share was left unchanged because the report does not disclose how much of the refund was recorded in the joint ventures; if part of it was, EPS in this column is slightly higher.

What drove earnings: the spread between the steel price and the scrap price

The average external price per ton in the steel mills rose from $1,041 to $1,145 within a year, while the cost of scrap and scrap substitutes rose from $403 to $422 per gross ton. The spread between price and scrap cost, per net ton, widened from $681 to $768 (our computation from the presentation data). For comparison, the spread for full-year 2025 was $658.

The report attributes the pricing environment to two factors: strong demand from data centers, energy, infrastructure and advanced manufacturing, and federal trade policy — the Section 232 tariffs, fully reinstated in 2025 without exemptions, alongside 142 antidumping and countervailing duty orders. According to the company's presentation, the import share of finished steel fell from 23% in 2024 to 21% in 2025 and to about 16% in the first half of 2026.

Pre-operating and start-up costs of new facilities, which the company expenses in full, were $120 million in the quarter ($0.40 per share) and $228 million in the half, against $306 million in the comparable half. The accrual for the employee profit-sharing plan rose to $258 million in the half from $117 million — this line moves with earnings, in both directions.

Nucor's balance sheet is conservative relative to the industry. Net debt at July 4, 2026 was $4.41 billion — 0.8 times trailing-twelve-month EBITDA, per the company's presentation. The only financial covenant in the credit facility is a 60% cap on funded debt to total capital; the actual ratio is 23.4%. The $2.25 billion revolving facility, in place until March 2030, is undrawn.

Three balance-sheet details stand out. First: $843 million of the $2,478 million of cash — about a third — is held inside the 51%-owned joint ventures. Second: $500 million of 4.30% notes due 2027 were reclassified to current liabilities in the quarter, which lowered the current ratio from 2.9 to 2.5. Maturities are spread out: about $1.09 billion in 2027–2028, a similar amount in 2029–2030, and the balance ($4.69 billion) from 2031 onward, out to 2055. Third: on August 21, 2026 the company filed a shelf registration statement (S-3ASR).

The investment cycle: from the peak downward

In the three years 2023–2025 Nucor invested $8.90 billion in property, plant and equipment — in 2025 alone, 2.8 times depreciation. The result was negative free cash flow in 2025. According to management, capital expenditures in 2026 will total about $2.5 billion, and in the first half free cash flow turned positive again.

Working capital absorbed $668 million in the first half: receivables grew by $952 million and inventories by $560 million. This is a feature of the business rather than an anomaly — when prices rise working capital consumes cash, and when prices fall it releases cash. In 2024, a year of falling prices, it released cash.

In the second quarter the company repurchased 1.5 million shares at an average price of $228.76. By month: $192.65 in April, $231.57 in May and $247.07 in June. In the fourth quarter of 2025 repurchase prices ranged from $136.67 to $162.31. Total returns to stockholders in the half, $733 million, equal 38.6% of earnings — against a stated policy of at least 40% "over time", and about 73% over the three years ended 2025.

The three segments moved in different directions in the quarter, and that dispersion is the heart of the story. The steel mills segment nearly doubled its earnings year on year, while the steel products segment earned less — although it sold more, at a higher price.

Steel mills

Segment earnings of $1,556 million include the $130 million refund described above. Excluding it, earnings per ton shipped were about $201, against $160 in the first quarter and $130 a year earlier. Prices rose across every product group: sheet $1,088 per ton against $1,008, bars $1,049 against $927, structural $1,608 against $1,352, plate $1,263 against $1,194. Plate shipments rose 25% year on year as the Brandenburg, Kentucky mill entered production.

A structural detail that governs the speed of change: per the annual report, about 85% of sheet sales are made under contracts of six to twelve months, with monthly or quarterly price adjustments to a market index. Nucor's realized price therefore lags the market price — on the way up, and also on the way down.

Steel products

Volume rose 13%, average price rose 4%, and earnings fell 10%. The report explains this as "margin compression resulting from higher steel input costs". Earnings per ton fell from $344 to $275. The picture inside the segment is uneven: tubular shipments rose 39% at a higher price, while in joist and deck both volume (down 9%) and price (from $2,605 to $2,450 per ton) declined.

Over a multi-year view, segment earnings fell from $3,444 million in 2023 to $1,229 million in 2025, and the first-half 2026 pace is similar to 2025. In 2023 the segment contributed 46.5% of the company's segment earnings; in the first half of 2026, 18.0%. Goodwill of $2,817 million is carried in this segment, and the auditor designated the impairment test of "a certain reporting unit" within it as a critical audit matter in the 2025 report. The report does not identify the unit or disclose its headroom; according to management, an increase of about 50 basis points in the discount rate would not have resulted in an impairment.

Raw materials

Segment earnings rose to $146 million from $45 million in the prior quarter, mainly on the DRI facilities and higher scrap prices. About 80% of segment sales are internal. According to management, segment earnings in the third quarter will be lower, on lower scrap pricing and higher iron ore pellet costs.

Nucor's annual report puts it plainly: "we primarily compete on price and service". Steel is a commodity, and a producer's advantage in such an industry is measured not by brand but by position on the cost curve, proximity to the customer and the ability to survive the bottom of the cycle.

Cost structure. Electric arc furnaces are fed with scrap and electricity and can be slowed or accelerated within days. Integrated producers running blast furnaces carry, per the report, "higher capital and fixed operating costs". At Nucor the pay component is flexible too: the profit-sharing accrual was $256 million in 2025 and $298 million in 2024, and it tracks earnings.

Control of raw material. DJJ is North America's leading scrap broker, and the two DRI plants supplied about 3.3 million metric tons of high-quality scrap substitute in 2025. The report presents this as flexibility: when prime scrap becomes expensive, the mills change their charge mix.

Breadth of portfolio. Nucor describes itself as "North America's most diversified steel producer" and the leading U.S. supplier of structural steel, merchant bar, joist and deck, pre-engineered metal buildings, steel piling, electrical conduit and insulated metal panels. Nucor-Yamato is the continent's only producer of high-strength, low-alloy beams.

What limits the advantage. According to the OECD, global steel overcapacity is about 704 million tons — eight times annual U.S. production. China produced more than one billion tons in 2025 and exported a record 131 million tons. The U.S. price stands above the world price because of a tariff wall, and the report itself cautions: "Tariffs and quota arrangements impacting steel and steel products may be enacted, enforced, extended, modified or terminated in the future. No assurance can be given as to the timing or extent of any of these changes." In addition, domestic electric-arc competitors are adding capacity, and Nucor itself is adding 3 million tons of sheet in West Virginia, about 21% on top of its existing sheet capacity.

Principal risks

• Trade policy. The current margin rests on the Section 232 tariffs and 142 duty orders. The annual report: no assurance as to the timing or extent of changes. Some of the carve-outs set in June 2026 run through December 31, 2027.
• New supply. Nucor's West Virginia mill (3 million tons) enters production in 2027; in parallel, other producers have announced additional U.S. mills with combined capacity of several million tons for 2027–2029.
• Demand cyclicality. Nonresidential construction is the largest end market. Residential construction and automotive, per the company, are already soft.
• Scrap and raw material prices. The largest component of production cost. Additional electric-arc capacity in the industry raises demand for prime scrap. Per the company, iron ore pellet costs have risen.
• Goodwill in the products segment. $2,817 million, with a critical audit matter on one reporting unit. The annual test is performed in the fourth quarter.
• The Mexico venture. Assets of $217 million; a triggering event was identified in the fourth quarter of 2025, with no impairment recorded.
• Management turnover. A new chief financial officer since March 2026; the chief operating officer and the head of commercial retired in mid-2026, per the company as part of succession planning.

Matters under monitoring — measured directly from upcoming reports