Nucor's Q1 2025: Unraveling Key Contradictions in Capacity, Costs, and Demand Dynamics

Capacity utilization and demand trends, logistics and tariff exposure, capital expenditure strategy, demand pull-forward or underlying demand, conversion costs and inflation are the key contradictions discussed in Nucor's latest 2025Q1 earnings call.



Investment and Capital Allocation:
- Nucor invested nearly $860 million into the company with approximately two-thirds allocated to projects with future operations expected within the next two years.
- The investment was driven by a strategy to strengthen and diversify earnings for long-term shareholder value and better serve evolving customer needs.

Strong Demand and Backlog Growth:
- Nucor's steel mill segment saw backlogs rise over 30% in the first quarter, and steel products backlogs increased by nearly 25%.
- The increase in backlogs was due to strong order entry rates and stable pricing, supported by ongoing infrastructure projects and an improving demand environment.

Impact of Trade Policies and Tariffs:
- The reinstatement and broadening of Section 232 steel tariffs, along with anti-dumping duties on coated flat rolled steel, are expected to benefit Nucor.
- These policies aim to stop unfairly traded imports, strengthening the U.S. steel industry, which is crucial for Nucor's growth and competitiveness.

Capital Project Updates:
- Several new facilities and expansions are expected to commence operations within the next 12 months, including the Rebar Micro Mill in Lexington, North Carolina, and new coating facilities at sheet mills.
- These projects aim to enhance Nucor's earnings profile and better serve evolving customer needs, with a focus on advanced manufacturing and infrastructure projects.