Robust demand driving Nucor shipments, earnings higher likely to extend into 2027: execs

Key takeaways:

• Nucor raised its 2026 growth expectations as shipments, pricing and earnings all increased sharply in the second quarter, with management expecting stronger results in the second half of the year.
• Demand is being driven by structural market factors, including low import volumes, infrastructure projects, energy investment, data center construction and manufacturing reshoring rather than short-term price spikes.
• Management sees momentum extending into 2027, supported by record backlogs, improving service center demand, rising automotive shipments and a significantly larger addressable market for domestic steel producers.

Nucor sees strong demand momentum, raises shipment growth outlook

“I couldn’t be more optimistic in the back half of this year. But, as we head into [next year], I think 2027 could be a very special year, not just for Nucor but this industry,” Leon Topalian, chair and chief executive officer, said.

“We now expect shipment growth [for 2026] to finish closer to the higher end of our previously suggested 5 to 10% range,” Stephen Laxton, president and chief operating officer, said.

Steel shipments, steel prices and earnings surge in second quarter

Total steel mill shipments rose to 7.10 million tons in the quarter ending July 4, 2026, a 9.7% increase over 6.474 million tons in the second quarter of 2026.

A 25% increase in plate shipments, an 11% increase in bars and an 8% gain in sheet drove the overall surge.

The average sales price rose to $1,367 per ton, a 10.2% increase from $1,240 per ton in the prior-year second quarter.

Earnings surged to $1.625 billion in the second quarter, jumping higher by 80.8% from $899 million in the prior-year period.

“The second quarter was largely carried by steel mills improvement, with Nucor building off a record first quarter on the volume side,” Samuel McKinney, metals analyst at Keybanc Capital Markets, told Fastmarkets on Tuesday.

“Steel mill spreads increased roughly $50 per ton, [and] total company’s overall average selling price increased $89 per ton quarter over quarter,” the analyst added.

“We’d expect both spreads and pricing to improve moving into a third quarter in which Nucor is calling for even higher quarter-over-quarter earnings,” McKinney said.

US steel demand drives higher prices and stronger order books

In response to an analyst query on the potential for lower import prices to dent demand, Topalian replied, “The reality is that it’s not a pricing delta that is driving that — it’s the demand picture we’re seeing.”

“The robust demand in almost every product group area that we have is either at or near record backlogs, record order-entry rates and is driving, again, healthy returns for our shareholders,” the CEO said.

“This isn’t what we saw in ‘21 or ‘22 where you had a really rapid spike of HRC and kind of knew it wasn’t sustainable,” Topalian said.

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Lower steel imports boost market share for domestic steel producers

Noah Hanners, executive vice president, sheet products, provided additional commentary on factors driving customer steel demand.

“Imports, while a little elevated in Q2 [the second quarter], remain very low,” Hanners said. “So if you go back to 2024, we saw sheet imports at 9 million tons. Today we look forward, we see probably 4.5 million tons [of sheet imports] this year.”

That translates into a gain of 4.5 million tons of demand “for domestic suppliers” that now are selling to customers that two years ago were buying imports, Hanners explained.

In addition, there is also another 2 million tons increase in overall steel demand in the US for 2026, compared with 2025, Hanners said. “So we have 6.5 million tons of addressable market for domestic suppliers — a strong market for us to participate in,” he added.

Infrastructure projects and manufacturing reshoring increase US steel consumption

“Border fence, energy, data centers — these things are all consuming millions of tons and they’re not projects that are one-off in 2026. We expect multi-year demand out of some of these.”

In addition, the ongoing reshoring of manufacturing is also increasing overall domestic US steel demand, according to Hanners.

“The onshoring looks different than you may expect. It’s things like auto and consumer durables.”

While overall consumption of these products may not be rising, Nucor is seeing its customers reshore production within existing manufacturing capacity in the US, Hanners explained.

Automotive demand and service center recovery support steel market growth

“Our auto shipments are up 6% Q2 over Q1,” Hanners said.

In addition, Nucor is “finally seeing service center demand turn the corner [with] shipments up 10% in June year over year,” Hanners said. “And we expect that trend to continue with really moderate to low inventories throughout the supply chain.”

Hanners also credited Nucor’s weekly Consumer Spot Price (CSP) for Midwest hot-rolled coil for playing a moderating role in pricing trends.

“It’s not just demand, but it’s how pricing has moved over the last 6 months to a year. And we believe our discipline and our approach around CSP is markedly changing volatility in this market,” Hanners said. “We’re seeing buying that is reflective of supply and demand, not speculation.”

Nucor expects strong US steel demand and limited imports into 2027

Nucor also believes that imports are remaining low in part “because customers are able to buy what they want when they need it,” Hanners said. “So we see a really strong demand picture [and] we feel good about 2026 going into 2027.”

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