Dive Brief:
- Nucor Corp., the largest steel manufacturer and scrap recycler in North America, saw steel mill shipments surge during the third quarter compared to last year, driven in part by increased data center construction.
- The Charlotte, North Carolina-based company reported Q3 steel mill earnings of $793 million, down 6% from the previous quarter and up 157% from a year ago.
- Nucor has benefited in part from “white hot” data center demand, CEO Leon Topalian said in an earnings call Tuesday. That combined with its new U.S. facilities and expansions ramping up has created a “tsunami of earnings power” for the company in the near future, he said.
Dive Insight:
In an effort to expand its steelmaking capabilities, Nucor has been positioning itself to be a key steel supplier for data center and e-commerce-related construction projects. Last year, the company acquired Southwest Data Products, a manufacturer and installer of data center infrastructure, for $115 million. Nucor also formed a business unit called Nucor Data Systems to better handle orders with hyperscalers and their developers.
“We now supply over 95% of all steel products that go into a data center from the building envelope to the interior infrastructure,” Topalian said, adding that this uniquely positions the company to handle steel for “conventional structures as well as preengineered buildings at scale.”
During Q3, Nucor saw steel mill shipments grow 12% to 6.4 million tons over last year, including for sheet, bar, structural and plate products. The company also saw tonnage increase 28% and 50% year over year for rebar fabrication and joist-and-deck products, fueled by increased demand for data center construction materials. Net sales totaled $8.5 billion for the period, up 145% from last year.
As domestic demand increases, Nucor has also been affected by the Trump administration’s 50% Section 232 tariffs on steel imports. U.S. imports of Nucor’s sheet products are down 35% year-to-date from last year, according to the company’s Q3 presentation. Since the tariffs took effect, Topalian said the company has seen “larger month-over-month reductions in imports and expect the trend to continue.”
Topalian called the tariffs a “necessary tool” to counter international overcapacity, saying they “must stay in place with no exceptions or loopholes until there are fundamental changes in the global steel industry.”
Nucor also ended the quarter with a strong balance sheet, analysts noted on the call. The company had $2.75 billion in cash, cash equivalents and investments on hand. It also has not withdrawn from its $2.25 billion credit instrument, which expires March 2030, and has some of the strongest credit ratings in the North American steel sector.
Looking ahead, Nucor is expecting Q4 earnings to be lower than Q3, citing seasonal pressures, lower prices and planned outages at its iron facilities.
Nucor also has new projects coming online, including two sheet coating facilities in Crawfordsville, Indiana, and Berkeley County, South Carolina, as well as a sheet mill in West Virginia that is two-thirds complete and scheduled to begin ramping up by the end of next year. The company also completed construction of its Kingman, Arizona, melt shop during the quarter, and commissioned a rebar micro mill in Lexington, North Carolina.
John Hollatz, EVP of fabricated construction products, said Nucor has converted a couple of its factories over the last several months to help the build-out of these data centers “because we see that market being so hot” over the coming years.
