Nucor’s Record-Breaking Backlog: How Steel Tariffs Fuel Growth Amid Trade Wars

Nucor Corporation (NUE) is riding a wave of unprecedented demand, with its CEO declaring the company’s order backlog to be the largest in its history. The surge, driven by Trump-era steel tariffs and a reinvigorated “America First” trade strategy, has positioned the steelmaker as a key beneficiary of protectionist policies reshaping global trade. Here’s why investors should take notice.

The Tariff Landscape in 2025: A Shield for Domestic Steel

The Trump administration’s Section 232 tariffs—enacted in March 2025 and maintained through Proclamation 10896—impose a 25% tax on imported steel and derivatives, effectively walling off foreign competition. These tariffs, expanded to cover a broader range of steel products, have revoked prior exemptions and intensified pressure on global competitors. For Nucor, this means reduced import competition and a clearer path to capturing domestic demand.

The policy also includes anti-dumping duties on producers in 10 countries, further tilting the playing field in favor of U.S. manufacturers. Nucor’s filings highlight how these measures have spurred a shift toward domestic steel, with reduced imports creating a vacuum filled by Nucor’s own production.

Nucor’s Backlog Boom: Evidence of Strong Demand

Nucor’s Q1 2025 financials reveal a company at full throttle:
- Rebar and MBQ shipments surged ahead of 2024 levels, fueled by “mega projects” in construction and infrastructure.
- Plate and beam backlogs remain “robust,” with demand outpacing supply for structural steel used in industrial and commercial builds.
- Fabricated products, such as steel joists and rebar, are experiencing higher backlogs across most categories, driven by strong order entry rates.

Crucially, Nucor attributes this demand surge to trade policy advantages. The 25% tariffs have limited foreign steel flooding U.S. markets, while anti-dumping duties have further constrained competition. Management emphasized that “Growing Backlogs & Order Entry Rates” are now core strengths, with reshoring trends and infrastructure spending acting as tailwinds.

Why Investors Should Pay Attention

The backlog’s size—unprecedented in Nucor’s history—hints at sustained earnings growth. Key drivers include:
1. Infrastructure spending: U.S. projects, from bridges to highways, rely on Nucor’s rebar and plate products.
2. Reduced import competition: Section 232 tariffs and trade cases like the CORE initiative have eroded foreign steel’s cost advantage.
3. Capacity expansion: New greenfield facilities in Alabama, Indiana, and Utah (set to ramp up mid-2025) will help address backlogs in high-margin segments like towers and structures.

Nucor’s Q1 results underscore this momentum: shipments hit 6.83 million tons (up 10% year-over-year), while the Steel Mills segment saw earnings-per-ton gains. Looking ahead, the company projects “meaningfully higher” Q2 earnings, citing improved pricing in sheet and plate products and cost reductions in raw materials.

Risks and Considerations

The tariffs’ longevity remains uncertain. While the administration has no plans to suspend the 25% rate, future policy shifts or legal challenges could disrupt Nucor’s advantage. Additionally, global economic slowdowns or retaliatory tariffs (e.g., China’s 125% reciprocal duties) could indirectly pressure demand.

Conclusion: A Strategic Bet on Trade Policy and Steel Demand

Nucor’s historic backlog reflects a confluence of favorable trade policies and robust U.S. demand for steel. With tariffs shielding its market share and infrastructure spending driving growth, the company is well-positioned to capitalize on structural shifts in global trade.

Investors should note:
- Backlog trends: Nucor’s order entry rates across rebar, plate, and fabricated products are at multiyear highs, signaling sustained demand.
- Trade policy tailwinds: The Section 232 framework and anti-dumping duties are likely to remain intact in 2025, bolstering Nucor’s margins.
- Capacity and execution: New facilities and operational improvements aim to convert backlog into revenue without overextending the company’s balance sheet.

While risks exist, Nucor’s leadership in a protected domestic market makes it a compelling play on the “America First” agenda. For investors seeking exposure to a steelmaker thriving in a trade-war environment, Nucor’s stock could be a durable winner.

As Nucor’s CEO put it, “The tariffs are working”—and the numbers back him up.