Dive brief:
- Nucor Corp., North America’s largest steelmaker and scrap recycler, sawed off the steel mill shipments increased in the third quarter compared to last year, driven in part by increased data center construction.
- The Charlotte, North Carolina-based company reported third-quarter steel mill earnings of $793 million, down 6% from the prior quarter and up 157% from a year ago.
- Nucor has benefited in part from “hot” data center demand, CEO Leon Topalian said win call tuesday. That, combined with its new US facilities and increased expansions, has created a “tsunami of earnings power” for the company in the near future, he said.
Diving knowledge:
In an effort to expand its steel fabrication capabilities, Nucor has positioned itself as a key steel supplier for construction projects related to data centers and e-commerce. Last year, the company acquired Southwest Data Productsdata center infrastructure manufacturer and installer, for $115 million. Nucor also formed a business unit called Nucor Data Systems to better manage orders with hyperscalers and their developers.
“We now supply more than 95% of all steel products that go into a data center from the building envelope to the infrastructure inside,” Topalian said, adding that this uniquely positions the company to manage steel for “conventional structures and pre-engineered buildings at scale.”
In the third quarter, Nucor saw steel shipments grow 12% to 6.4 million tons from last year, including sheet, bar, structural and plate products. The company also saw tonnage increase by 28% and 50% year over year rebar and joist and deck manufacturing 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 rises, Nucor has also been hit by the Trump administration’s 50 percent Section 232 tariffs on steel imports. Nucor’s US imports of sheet products are down 35% year over year. according to the company’s third quarter presentation. Since the tariffs went into 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 remain in place without exceptions or loopholes until there are fundamental changes in the global steel industry.”
Nucor also finished the quarter strongly 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 drawn on its $2.25 billion credit facility, which expires in March 2030, and has some of the strongest credit ratings in the US steel industry.
Looking ahead, Nucor expects fourth-quarter earnings to be lower than the third quarter, citing seasonal pressures, lower prices and expected outages at its iron facilities.
Nucor also has new projects online, including two sheet coating facilities in Crawfordsville, Ind., and Berkeley County, South Carolina, as well as a sheet mill in West Virginia that is two-thirds complete and scheduled to start ramping up late next year. The company also completed construction of its Kingman, Arizona foundry during the quarter and commissioned a rebar micromill in Lexington, North Carolina.
John Hollatz, vice president of manufactured building products, he said Nucor has converted a couple of its factories in recent months to help build those data centers “because we see the market being so hot” over the next few years.
