Nucor Sheet Pricing Patience Paved Way to Market Strength
Nucor executives on their Tuesday earnings call with analysts described the first quarter as having robust sequential improvement, driven by record steel mill shipments, increasing backlogs, and less import competition. The call also shed light on Nucor’s sheet pricing strategy—one in which it did not “chase the market down” in the fourth quarter—paving the way for the current sheet market strength.
Alexander Hacking of Citigroup asked about the company’s “slow and steady” sheet price hikes, reflected by its weekly Consumer Spot Price (CSP) announcements for hot-rolled coil (HRC).
“We like slow and steady and our customers are liking slow and steady, and let’s take a little time to unpack that,” answered Noah Hanners, EVP of Sheet Products. “The fundamentals supporting pricing right now are really strong. And I would say the rally we’re in is probably the strongest kind of fundamentals we’ve seen for some time.”
Hanners provided some context for how Nucor views the rest of ’26 by recalling the last inflection point in the market, which was Q4 of last year, “the low side of pricing in Q4 of last year. And to think about how our strategies work differently this year.”
He explained that historically what usually happens during the trough in the market is opportunistic speculative buyers overload their order books to try to time the market. “And the result, if you think about traditional behavior in Q4 would have been that we would have overbooked on the mill side, lead times would have jumped significantly, prices would have jumped significantly, and we would have really overshot basic market fundamentals,” Hanners noted. “So then due to the spreads and the lead times, we then inevitably create the surge of imports that arrive a few months later, similar to what we saw in the back half of ’24. That’s what usually happens.”
Hanners said: “We’ve seen this time and time again in the sheet world. But this time, our trajectory and our behavior have been markedly, importantly different in this cycle. We didn’t chase the market down in Q4.”
Instead, he explained Nucor managed its order book to match what it saw as true underlying demand. “And you saw this reflected in our steady, I would call it, modest consistent approach with pricing in CSP, consistent modest increases that were supported by underlying demand.”
That approach, Hanners maintains, has helped to keep imports low. “If you think back to ’24 and you saw imports that were 9 million-ish tons. This year, we’re tracking 4 million or under. So, there’s a 5-million-ton window of serviceable market for domestic suppliers,” he said.
“That’s a huge impact to the positivity with which we see the market today. And then as importantly, the supply chain is really healthy right now. Inventory levels are modest, which just tells you we haven’t seen the speculation that traditionally drives the volatility we would see in this market,” Hanners added.
Regarding the strength of the current market, Hanners also noted that there are some key markets that are starting to show signs of positive outlook. “Service center shipments are starting to move up. They’re trending up. We’ve heard from HVAC customers recently that are really in the nonresidential construction space, about a really strong second half there. So, there’s some tailwinds there in non-res construction that yield some strength as well.”
He said work on the border fence amounts to 1 million-1.5 million tons over this year and next.
“So, all that together, we believe, supports a strong operating environment through ’26 and then into potentially next year,” Hanners said.
“At 7 million tons, this was the highest quarterly shipment volume in Nucor’s history, reflecting strong execution across our 26 steel mills and growing contributions from recently completed projects,” said Leon Topalian, chairman & CEO. “Equally encouraging is the momentum evident in our backlogs. At the end of the first quarter, our steel mills backlog was up to 4.7 million tons, a 20% increase from year-end and the highest level we’ve seen since the second quarter of 2021.”
Meanwhile, Nucor continues to make strong progress on its new sheet mill in West Virginia where construction is about 85% complete, and expects to see key milestones achieved in 2026, according to Stephen Laxton, president & COO. “We’re entering the final phases of construction, and we’ll be sequencing commissioning of operations throughout the year, beginning with the pickle line in the second quarter,” he said, noting that by the end of 2026, commissioning, inspecting and testing of all equipment across the mill should be complete.
“Following commissioning, our priority will be to operate safely and reliably as commercial shipments begin ramping up in early 2027,” Laxton added. “We will be increasing production and advancing product development throughout 2027 and ’28 with capacity utilization and product offerings building steadily over time.”
Once fully ramped, Nucor West Virginia will supply some of “the cleanest and most advanced sheet steel in North America with expanded capabilities to better service automotive and consumer durable markets,” Laxton said, positioning Nucor to grow market share in the Midwest and Northeast, two large sheet consuming regions where Nucor is relatively underweighted today.”