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Released October 24, 2024 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Nucor Corporation's (NYSE:NUE) (Charlotte, North Carolina) chief financial officer recently said he expects the steelmaker will continue to have capital expenditures above its historic norms in 2025. Industrial Info is tracking 67 active capital Nucor projects, worth $7.25 billion.
In the company's third-quarter earnings conference call, Steve Laxton did not provide an estimated figure for 2025 capital expenditures (capex), but said he expects 2024 capex will be $3.2 billion--slightly lower than $3.5 billion estimate provided at the beginning of the year. The $3.2 billion in 2024 capex would be a 45% increase from the $2.2 billion in 2023.
"With approximately two-thirds of Nucor's capital spending going into growth-oriented expansions, many of these projects are multiyear in nature," he said. "During the third quarter, the power of Nucor's business model allowed us to generate $1.3 billion in cash from operations. The strong cash generation is a key factor enabling Nucor to continue its balanced, consistent and long-term approach to allocating capital and creating value."
Also in the third-quarter earnings call, Laxton discussed long-term growth, including "deploying approximately $820 million in growth capex," as evidenced by Nucor's recent acquisition of Rytec, a manufacturer and seller of high-speed, high-performance commercial doors, for $565 million. Meanwhile, Chief Executive Officer Leon Topalian highlighted Nucor's recent acquisition of Southwest Data Products, a manufacturer and installer of data center infrastructure; now known as Nucor Data Systems, the entity will boost the steelmaker's offerings in the rapidly growing data center market.
Topalian also discussed factors driving future construction spend: "A few leading indicators we monitor have started to trend higher and further easing of monetary policy could spur increased construction activity as we get into next year ... When we look to the future, Nucor is well positioned given our diverse set of capabilities. And moving forward, we'll continue to seek ways to further diversify by investing in higher-margin businesses that are less cyclical and more aligned with secular growth trends. We have seen this play out in 2024 as returns from our steel products segment have shown more resilience than our steel mills."
Topalian also discussed some of Nucor's largest capital projects, including his expectation that construction of the $3.1 billion sheet mill in Apple Grove, West Virginia will wrap up by the end of 2026. Following the completion, the grassroot, 3 million-ton-per-year mill will begin supplying customers in the Midwest and Northeast with hot-rolled sheet products. Downstream processing includes a tandem cold mill, annealing capabilities and two galvanizing lines. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project report.
He also highlighted the expected commissioning of the steelmaker's automotive galv (galvanizing) line at its sheet mill in Berkeley County, South Carolina in the middle of 2026. The project, known as Project Kettle, features a 500,000-ton-per-year line to produce galvanized steel up to 72 inches wide and expand the manufacturing of corrosion-resistant products. Click here to read the project report.
In the meantime, Topalian said, Nucor will begin operations at the new melt shop at its steel rolling mill in Kingman, Arizona, which produces products such as straight-length rebar, coiled rebar and wire rod, in the first half of 2025. The 630,000-ton-per-year melt shop will add capacity to the 500,000-ton-per-year mill, to maintain the steelmaker's market-leading position in steel bar production and meet anticipated growth for bar products. Click here to read the project report.
Also in 2025, he said, Nucor plans to complete construction of three projects: two "highly automated utility tower manufacturing plants"--one in Trinity, Alabama, and another in Crawfordsville, Indiana--as well as a a "new galv line and coating complex" at a hot steel mill in Crawfordsville. Subscribers can click here for related project reports.
Regarding the company's balance sheet, Topalian said lower steel demand from several of Nucor's end-use markets, along with higher import volumes, has "put pressure on our margins throughout the year." And despite the Federal Reserve's recent rate cut, "it will likely take more time, more rate relief and looser lending conditions before we start to see the flow-through effect in the construction, industrial and consumer durables market that are so impactful to steel demand. That said, several markets do remain quite healthy. For example, construction related to semiconductor factories, advanced manufacturing facilities, data centers and institutional buildings are still very strong."
During the 12-month period ending in September, he said, the steel products segment contributed 42% of Nucor's pretax earnings, which is nearly three times that of the historical average.
Subscribers can click here for a full list of Nucor's active capital project activity.
Click here to see reports for all of the projects discussed in this article and click here for the plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
In the company's third-quarter earnings conference call, Steve Laxton did not provide an estimated figure for 2025 capital expenditures (capex), but said he expects 2024 capex will be $3.2 billion--slightly lower than $3.5 billion estimate provided at the beginning of the year. The $3.2 billion in 2024 capex would be a 45% increase from the $2.2 billion in 2023.
"With approximately two-thirds of Nucor's capital spending going into growth-oriented expansions, many of these projects are multiyear in nature," he said. "During the third quarter, the power of Nucor's business model allowed us to generate $1.3 billion in cash from operations. The strong cash generation is a key factor enabling Nucor to continue its balanced, consistent and long-term approach to allocating capital and creating value."
Also in the third-quarter earnings call, Laxton discussed long-term growth, including "deploying approximately $820 million in growth capex," as evidenced by Nucor's recent acquisition of Rytec, a manufacturer and seller of high-speed, high-performance commercial doors, for $565 million. Meanwhile, Chief Executive Officer Leon Topalian highlighted Nucor's recent acquisition of Southwest Data Products, a manufacturer and installer of data center infrastructure; now known as Nucor Data Systems, the entity will boost the steelmaker's offerings in the rapidly growing data center market.
Topalian also discussed factors driving future construction spend: "A few leading indicators we monitor have started to trend higher and further easing of monetary policy could spur increased construction activity as we get into next year ... When we look to the future, Nucor is well positioned given our diverse set of capabilities. And moving forward, we'll continue to seek ways to further diversify by investing in higher-margin businesses that are less cyclical and more aligned with secular growth trends. We have seen this play out in 2024 as returns from our steel products segment have shown more resilience than our steel mills."
Topalian also discussed some of Nucor's largest capital projects, including his expectation that construction of the $3.1 billion sheet mill in Apple Grove, West Virginia will wrap up by the end of 2026. Following the completion, the grassroot, 3 million-ton-per-year mill will begin supplying customers in the Midwest and Northeast with hot-rolled sheet products. Downstream processing includes a tandem cold mill, annealing capabilities and two galvanizing lines. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Project Database can click here for the project report.
He also highlighted the expected commissioning of the steelmaker's automotive galv (galvanizing) line at its sheet mill in Berkeley County, South Carolina in the middle of 2026. The project, known as Project Kettle, features a 500,000-ton-per-year line to produce galvanized steel up to 72 inches wide and expand the manufacturing of corrosion-resistant products. Click here to read the project report.
In the meantime, Topalian said, Nucor will begin operations at the new melt shop at its steel rolling mill in Kingman, Arizona, which produces products such as straight-length rebar, coiled rebar and wire rod, in the first half of 2025. The 630,000-ton-per-year melt shop will add capacity to the 500,000-ton-per-year mill, to maintain the steelmaker's market-leading position in steel bar production and meet anticipated growth for bar products. Click here to read the project report.
Also in 2025, he said, Nucor plans to complete construction of three projects: two "highly automated utility tower manufacturing plants"--one in Trinity, Alabama, and another in Crawfordsville, Indiana--as well as a a "new galv line and coating complex" at a hot steel mill in Crawfordsville. Subscribers can click here for related project reports.
Regarding the company's balance sheet, Topalian said lower steel demand from several of Nucor's end-use markets, along with higher import volumes, has "put pressure on our margins throughout the year." And despite the Federal Reserve's recent rate cut, "it will likely take more time, more rate relief and looser lending conditions before we start to see the flow-through effect in the construction, industrial and consumer durables market that are so impactful to steel demand. That said, several markets do remain quite healthy. For example, construction related to semiconductor factories, advanced manufacturing facilities, data centers and institutional buildings are still very strong."
During the 12-month period ending in September, he said, the steel products segment contributed 42% of Nucor's pretax earnings, which is nearly three times that of the historical average.
Subscribers can click here for a full list of Nucor's active capital project activity.
Click here to see reports for all of the projects discussed in this article and click here for the plant profiles.
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 200,000 current and future projects worth $17.8 Trillion (USD).
