Good morning, and welcome to Nucor’s Third Quarter 2024 Earnings Call. Today’s call is being recorded. I would now like to introduce Jack Sullivan, General Manager of Nucor Investor Relations. You may begin your call.

Thank you, and good morning, everyone. Welcome to Nucor’s Third Quarter Earnings Review and Business Update. Leading our call today is Leon Topalian, Chair, President, and I; along with Steve Laxton, Executive Vice President. Other members of Nucor’s executive team are also here with us today and may participate during the Q&A portion of the call. Yesterday, we posted our third quarter earnings release and investor presentation to the Nucor Investor Relations website. We encourage you to access these materials as we will cover portions of them during the call. Today’s discussion will include the use of non-GAAP financial measures and forward-looking information within the meaning of securities laws. Actual results may be different from forward-looking statements and involve risks outlined in our safe harbor statement and disclosed in Nucor’s SEC filings. The appendix of today’s presentation includes supplemental information and disclosures, along with a reconciliation of non-GAAP financial measures. So with that, let’s turn the call over to Leon.

Thanks, Jack, and welcome, everyone. Before we begin, I’d like to take a moment to say that our hearts go out to our neighbors in Western North Carolina, Florida, and across the Southeast in the wake of hurricanes Helene and Milton. While Nucor operations were not adversely impacted by the storms, we do have many friends and team members in these areas who were and now face the difficult task of putting their lives back together. Nucor will continue to support the relief effort and the monumental task of rebuilding. Turning to Nucor’s third quarter performance. Our 32,000 team members continue to raise the bar on safety performance, and Nucor remains on track for the safest year in the company’s history. Building on the progress we have been making for the last six years, our injury and illness rates continue to trend lower with 35 of 109 divisions injury-free through September. This is an amazing accomplishment, especially since it has occurred through all phases of the economic cycle and during a period of rapid expansion for the company. Through it all, Nucor team members have remained steadfast in their commitment to becoming the world’s safest steel company. Congratulations to the entire Nucor team, and let’s continue to stay focused as we close out the year. In the third quarter, Nucor generated EBITDA of $869 million and adjusted earnings of $1.49 per share. These figures exclude the impact of noncash pretax charges totaling $123 million or $0.44 per share, which Steve will provide more color on shortly. Nucor is committed to returning cash to shareholders and making prudent investments that create long-term shareholder value. And so far this year, we’ve made significant headway on both objectives. Through September, Nucor has returned $2.3 billion to shareholders through our share repurchases and dividends, and we’ve completed $2.3 billion of capital expenditures. All of this has been funded with operating cash flow and cash on hand, which ended the quarter at approximately $4.9 billion. Let me take a moment to provide a brief update on where things stand for some of our largest capital projects. In the first half of ‘25, we will commence operations of the new melt shop at our existing bar mill in Kingman, Arizona, and we will commission our new rebar micro mill located in Lexington, North Carolina. Also in 2025, we plan to complete construction of two highly automated utility tower manufacturing facilities and a new galvanizing line and coating complex at Nucor Steel Indiana. Turning to 2026, we expect to commission our automotive galvanizing line at our Berkeley County sheet mill in South Carolina by the middle of the year. And by the end of 2026, we expect to complete construction of our new state-of-the-art mill in West Virginia. Each of these projects is designed to address specific customer needs and will serve as a catalyst for long-term earnings growth. And while it can take time for large projects like these to reach their full earnings potential, our team has a strong track record of safely doing whatever it takes to get there. We’re also making progress integrating the teams and operations from recent acquisitions including Rytec and Southwest Data Products. These businesses present compelling growth opportunities for our overhead door and racking platforms, and we are pleased with the early progress we’re already starting to recognize. While the broader U.S. economy continues to be resilient, decreased steel demand from several of our end-use markets along with higher import volumes has put pressure on our margins throughout the year. The Federal Reserve’s recent actions are a good start, but 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 markets 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. There are some near-term catalysts with the potential to improve underlying steel fundamentals for 2025. 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. And while we recognize that new infrastructure spending has been less deal intensive than originally expected, we do still expect to generate incremental demand in the years ahead. 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. Steel product bookings and volumes may have fallen from their peaks, but current EBITDA margins remain well above historic averages. During the 12-month period ending in September, our steel products segment contributed 42% of Nucor’s pretax earnings, which is nearly three times the historical average. There’s been a lot of attention on trade recently, so let me touch on that topic now. Nucor, along with other domestic steel producers, continues to advocate for the vigorous enforcement of trade laws. The recent surge in high emissions imported steel continues to negatively affect both domestic steel prices and mill utilization rates. As a result, Nucor recently joined several other steel producers in filing cases against imports of corrosion-resistant flat-rolled steel from 10 nations. As we have done for decades, we will continue to closely monitor imports and bring cases when products are illegally traded in our market. We applaud the International Trade Commission’s preliminary determination that there is a reasonable indication that the domestic corrosion-resistant steel industry has been materially injured as a result of illegally dumped and subsidized imports. We also applaud the Department of Commerce’s decision in August to continue classifying Vietnam as a nonmarket economy. State-owned enterprises continue to play a major role in Vietnam’s economy, and China continues to circumvent trade duties by relocating production and shipping products through Vietnam. Any change to Vietnam’s market status would have significantly impacted the calculation of U.S. antidumping duties. With the 2024 presidential election just two weeks away, we believe the American steel industry is well positioned regardless of the outcome. We have made it a priority to work with elected officials from both parties, in Congress, and with both Republican and Democratic administrations, and both have a strong task of our trade issues. After years of work by our industry, there is now bipartisan consensus that strong trade enforcement is a priority and that we need to fix our trading relationship with China. There’s also been strong bipartisan support for infrastructure spending. We look forward to working with whichever administration is in office just as we have done for decades. With that, I’ll turn it over to Steve, who will share additional details on our third quarter financial results.

Thank you, Leon, and thank you for joining us on the call this morning. During the third quarter, Nucor generated net earnings of $250 million or $1.05 per share on a GAAP basis. As Leon mentioned earlier, we booked one-time noncash charges totaling $123 million or $0.44 per share during the quarter. These pretax charges included an $83 million impairment of certain noncurrent assets in our raw materials segment and a $40 million impairment of certain noncurrent assets in our steel products segment. Excluding these charges, our adjusted earnings were approximately $373 million or $1.49 a share. Through September, Nucor’s year-to-date adjusted earnings were approximately $1.8 billion or $7.66 a share. Turning to segment level results. The steel mills segment generated pretax earnings of $309 million, a decrease of roughly 50% from the prior quarter. Lower realized pricing, especially among our sheet mills, was the largest driver of reduced profitability. The steel products segment delivered adjusted pretax earnings of $354 million for the third quarter, a decline of approximately 20% compared to the second quarter. Volumes for the segment were 6% lower than the prior quarter. The quarter saw a lower realized pricing for joist, deck, and tubular products, while pricing for most other products in this segment remained relatively stable. Nucor operates the most diverse and comprehensive range of market solutions in our industry. In our steel product segment, our joist and deck and tubular products business typically account for about 40% of segment shipments. So let me provide a little more color on these two businesses. Average realized joist and deck pricing during the past quarter was down about 7% from the prior quarter, while joist and deck pricing has continued to moderate from the peak levels of recent years. Backlogs remain strong through the first quarter of 2025, and we continue to earn attractive margins in this business, well above historic averages. For our tubular products, declining sheet prices have meant lower substrate costs, but this benefit has been offset by weaker tube pricing. Softer demand, additional new domestic supply, and increased imports have combined to weigh on pricing and margins for tubular products. An important part of Nucor’s strategy is continued value creation and accelerated growth in what we call Expand Beyond. Over the past few years, Nucor has made meaningful strides to increase our range of solutions and leverage our exposure to key macro trends and markets, including adding several entirely new businesses into the new core portfolio. Three of these businesses, insulated metal panels, racking, and overhead doors generated EBITDA of approximately $380 million over the past 12 months. While they’re not immune to the impacts of the changes in the construction markets, the relatively stable earnings power is a testament to their resilience. Looking ahead, we remain optimistic about the growth prospects for these businesses and expect them to serve as meaningful catalysts in Nucor’s cash flow growth in the years to come. Our raw materials segment realized adjusted pretax earnings of approximately $17 million for the quarter, down approximately $22 million from the second quarter. Lower volumes and margins in our recycling operations were the primary drivers for the change in quarter-over-quarter performance. Turning to our fourth quarter outlook. We expect Nucor’s consolidated net earnings to be lower than that of the third quarter. The majority of this anticipated variance is attributable to the steel mill segment where earnings are expected to decline on lower realized pricing and seasonally lower volumes. We also expect sequentially lower earnings in our steel products segment, also due to lower realized pricing and volumes. Earnings in the raw materials segment are expected to be moderately higher. Taken together, consolidated EBITDA for the fourth quarter could be meaningfully lower than the third quarter. Turning to 2024 capital expenditures. We now expect CapEx for the full year to be approximately $3.2 billion, slightly lower than the $3.5 billion estimate provided at the start of the year. With approximately two-thirds of Nucor’s capital spending going into growth-oriented expansions, many of these projects are multiyear in nature. Consequently, as we look towards 2025, we expect Nucor to continue to have capital expenditures above its historic norms. 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. During the quarter, Nucor provided meaningful direct returns to shareholders of $530 million by way of buybacks and dividends. We also continue to invest for long-term growth, deploying approximately $820 million in growth CapEx and grew our expansion capabilities, closing on the acquisition of Rytec for $565 million. Nucor has executed on these endeavors, all while maintaining a strong balance sheet. At the end of the third quarter, our total leverage stood at roughly 1.4 times trailing 12-month EBITDA, and our cash on hand was a healthy $4.9 billion. This position of strength is a foundational source of advantage and an enabler of continued future growth, value creation, and shareholder returns. And with that, we’d like to hear from you and answer any questions you may have. Operator, please open the line for questions.

Your first question comes from Lawson Winder with Bank of America Securities.

I wanted to ask about Brandenburg, if I could. Could you just comment on the ramp up there, the outlook for continued growth in production? And any comment on the plate pricing outlook would be really helpful.

Absolutely, Lawson. I appreciate the question. And I’ll kick it off and turn it over to Brad Ford, and ask him to comment. I assume specifics, but I would tell you, in general, we’re incredibly optimistic about our plate market, our plate group, and the things that are going on, again, against the backdrop of the plate market and in particular, Brandenburg, and its continued ramp up. The team there continues to operate incredibly well. And again, we’re proud of that success. We’re proud of how they’ve done it incredibly safely and positioned Nucor with the widest and most diverse set of plate offerings in North America. But Brad, maybe you want to touch on the exact ramp up, what we’ve done to date and then the outlook, not so much in pricing, but how we continue to build on our current portfolio as we move forward.

Thanks, Leon. Thanks for the question. I’ll echo what Leon said and thank our team for their accomplishments during the quarter, most notably in September, when the team broke records across the board in terms of performance, production records, smelt cash records, rolling record, shipping record, and our lowest conversion cost for the year, and a bookings record. So truly a step change in the performance out of Brandenburg. And we continue to see improvements in utilization, product development, quality, and see better results each quarter. And just as a reminder, Brandenburg was built to expand the capabilities of the plate group portfolio. There are grades and sizes that we’ll only be able to make at Brandenburg. So as we think about ramping up, we're really targeting those volumes, those applications, and those customers specifically, things like the 150-inch wide plate that we shipped on our proprietary tilt cars for a bridge project during the quarter or the order that we received for Elcyon, our branded S355 monopile plate for offshore wind. Our customers are excited about the capabilities at Brandenburg. As we meet with them and they get a chance to visit and spend time with our team, they get even more excited about sourcing a domestic sustainable product out of Brandenburg to meet their needs. We’ll continue to ramp up Brandenburg thoughtfully and methodically. The tonnage will come as evidenced by the increased shipments each quarter this year. But we’re really focused on the right tonnage. The right mix of products that maximize profitability, not just at Brandenburg but across our plate group.

Okay. That’s very helpful color. If I could ask a follow-up. You commented in your release that lower interest rates would take some time to flow through. And that’s been a consistent discussion that we’ve been having in terms of a catalyst for steel pricing and for steel demand in general. Do you have any thoughts on when that benefit might start to flow through?

Yes. I would tell you, I think, Lawson, as we see that, I think it’s compounded with the current election. Quite frankly, I think as we see some clarity in hopefully, two and a half weeks, we – not just as an industry and the steel industry, but as the nation will begin to, okay, now we can take out the ambiguity and the uncertainty of trade policy, whether that’s taxes, imports, tariffs, and the like, to know how to position ourselves and our customers to position themselves, to have more surety in the lending environment. And again, the fiscal environment in which they continue to release those projects. So I think both the interest rate flow through and again, the initial drop of 500 basis points as well as what’s forecasted for the end of the year and into ‘25, again, I don’t think that’s measured in the back half of ‘25. I think that will flow through much faster. But again, against the backdrop of the current election, I think we have to get through that, and then you’ll start to see some movement in the release of current jobs and those that have been waiting just to see, right? What’s the corporate tax rate is going to end up at? What are we going to do with trade? What’s the environmental regulation environment going to look like in the United States post two weeks from now? So stay tuned, but I do think that movement should begin to release post November.

Lawson, if I could, I’d just add a comment to what Leon said. The backdrop of the macroeconomic conditions that we’re in are actually very encouraging. If you think about it with unemployment being where it is in our consumer-driven economy, we’ve seen the CPI and the Fed’s favorite measure of the PCE come down quite a bit over the last two years. And if you think back, where economists were projecting maybe 18 to 24 months ago that we would be in a recession. We’re actually in a fairly stable and good place. So those points that Leon was highlighting have even more potential catalysts and impact given the relative stability in the overall macro economy.

Your next question comes from the line of Timna Tanners with Wolfe Research.

I wanted to ask about two things. One is when you talked in the Investor Day a couple of years ago, there was going to be quite a bit of contribution from a number of government initiatives. I think we’re well underway with those spending patterns with the IRA and the CHIPS Act and IIJA. What do you think you’ve seen? And what do you think is yet to materialize of those numbers you’ve disclosed in the past?

Yes, Timna, look, I think it’s a fair question. And like you, we continue to wait to see on some of those IIJA and IRA being the two probably in the – still in the early stages of that. The good thing is, as we know, it’s past the legislation. It’s not maybe in – might be. It’s – okay, at what point does that flow into our sector. But look, we have seen meaningful moves, particularly in CHIPS, right, with over $370 billion of committed projects. I think that comes out to something in the range of about 60 semiconductor facilities that are planned to be built in the United States, with over 20 of those now currently under construction. So those are massive major complexes. Facilities are large-scale steel-intensive in building them, but also supplying our end-use customers to move through. So that’s moving. Again, we’ve seen some support in the IRA in terms of solar and toward tubes that we’re supplying. But again, I would tell you, on both infrastructure and IRA, we’ve yet to see the meaningful flow through in both of those pieces of legislation into the order books.

So – yes, sorry?

Well, look, I was going to say, what Steve and I just commented to the macroeconomic trends that – look, the election is going to have a big part of that, right? And again, I don’t want to speculate on what President Trump’s 2.0 or Kamala Harris’ 1.0 would look like. But obviously, some of that could be changed, right? There’s obviously discussions of serving out pieces of the IRA. So I think in both of those, we’re going to need to see the surety of, okay, who’s in office and what are those fiscal policies and what monetary policies are going to drive through in the manufacturing sector?

So of the 5 million to 7 million targeted additional tons per year that you talked about, would you say we’re on the lower end or below that so far? Is that what you’re talking about?

Yes. I mean, look, we – I think we estimated somewhere between 3 million and 5 million tons of supply for a 10-year period of time. And so yes, I’d say we’re under that for sure. I don’t have a number sitting in front of me, but no, I would think that categorization is safe that we’re under that scale.

Okay. Fair...

Timna, I was just going to add as well, some of the spend we’ve seen to date has been more shovel-ready, less steel-intensive. We’re starting to see some of the bridge projects come forward. And one of the things that is apparent with those is just to delay the timing of those. Sometimes it could take four years or more once those are announced before we’re starting to see the steel arrive on those sites.

Okay. Super helpful. And I’ll just ask one more then, if I could. I know Lawson asked about Brandenburg, but just thinking broadly into 2025, high level, you have a number of other projects that would be additional capacity, I believe. Correct me if they’re replacement. But I think Lexington and Kingman are additional volumes. So how do we think about the time frame for seeing those additional volumes hit the market? And are market conditions sufficient to be able to see incremental supply from those new mills, do you think?

Yes. Timna, you followed us a long time, Nucor’s investment strategy and our capital allocation strategy is obviously for the long term. It’s not reflective of the peaks and valleys of current market conditions. Again, I put the one caveat there that we’re also keenly aware of what the end markets are doing and take the relevant required actions when necessary. So if we go back to 2020 with a Black Swan event like a global pandemic, we paused. We stopped Brandenburg and our project in Gallatin at the time, just to really analyze how deep was this? How long would it stay with us? But as we look today at those projects, you name, they are additional capacity, but we’re in a commodity-driven business. Supply and demand is always going to dictate. So if we have the best quality, lowest price, and offer a differentiated capability set, we’re going to win. And so I love where Nucor sits, I love our growth strategy and the markets that we’re going to serve because they’re underserved. If you take West Virginia, for example, in the Northeast, that is the lowest market share that we have in the entire U.S. So we’re underrepresented in that region. And again, we can bring a different set of products to that market that, again, we know our customers are asking for and demanding. So as that comes online. And again, obviously, in sheet, you’re keenly aware, we’re talking start-up by the end of ’26 but really meaningful volumes into ’27. So you’re still a couple of years away from that happening. And again, what does the economy look like then? Well, I can’t predict. What I can predict is when you referenced our Investor Day in November 2022, we are confident that our through-cycle EBITDA will be at or above $6.7 billion. So again, we love our investment portfolio, where we’re going, the Expand Beyond piece, that’s very complementary. And again, we feel confident the additions we’re making in this backdrop of our end-use demand.

Your next question comes from the line of Martin Englert with Seaport Research.

I wanted to briefly touch on the steel conversion costs, unit costs in your guidance in the slide deck. You expect some slight decrease quarter-on-quarter on Q4. I’m curious why a decline given that you’re also expecting lower volumes. Does this have to do with substrate costs or some other costs, and then along the same lines there longer term, maybe if you could speak to where you expect through-cycle conversion costs after you kind of exited ramp-up costs with greenfield facilities.

Thanks for the question, Martin. This is Dave Sumoski. When you look at costs, and I’m sure you’ve looked at cost pre-COVID versus today, they’ve gone up quite a bit. Inflation utilization has been a big part of that. CSI, the addition of CSI into our consolidated reporting comes up in operational cost based on our accounting and then the start-up costs, as you mentioned. So outside resources, critical or startup has been stressed, and that’s really affected a lot of our start-ups. So that has certainly increased our costs. So as we move forward, we don’t really see inflation although it’s stabilized, it’s not ratcheting back. But our utilizations will go up as our start-ups increase and effectiveness. We made several very good improvements, and we feel good about the fourth quarter. If you do see a big impact just in the fourth quarter, probably not going to see it. But we’re going to see an impact based on utilization rates coming up and our start-up costs going down. And we have a tremendous amount of projects still going on, some of them coming on and going off from startup mode that will still continue to affect our costs in the future. But as all those startups roll off, our costs will stabilize and get back down to maybe not prepandemic levels based on inflation, but considerably better.

A follow-up question on the core trade case. Maybe if you could just remind us of Nucor’s coating capabilities and your interest in serving more of the lighter gauge markets wherein historically, maybe some producers shied away from this due to less favorable fixed cost leverage?

Yes, Martin, I’ll kick it off and Steve, if you have any additional comments. But we continue to look for, again, the differentiated capability set. It’s not about volume. It’s not about capacity. And so moving up the value chain to coated products first, I would tell you, we applaud the ITC and the administration’s initial finding that there’s material injury to the steel industry. We think that’s long overdue. We’ve looked at some of the spikes that we’ve seen, like out of Mexico, for example, of 180% in a quarter basis. So again, in the backdrop of a global oversupply situation, particularly coming out of China with roughly 100 million metric tons of steel looking to find a home, well, the greatest home in the world is the United States, it’s the greatest and strongest economy. So how it has to get there in the circumvented? What I would tell you is Nucor and the industry need to continue to be tireless advocates in Washington. Again, I’m proud of the work that’s been done. I’m proud of the ITC finding, but that vigilance can never end. Back to your exact question, as we look to expand our current capabilities with our galvanizing lines at Newcor Berkeley, two in West Virginia, Crawfordsville, Indiana with the galvanizing and prepaint. It’s to move us to somewhere between 35% and 40% over the next several years and again, better that growing end market, which is growing, and again, position us a little bit better in terms of the value-added products and getting a little less dependent on the HRC.

This is Noah. Maybe just to add a little bit more color on top of Leon’s comments. First of all, we’re really excited about the core case. It is substantial. It’s big for us. About 20% of that core steel market, if you look back to ‘21 through ‘23, it’s been served by import. But over the last year, we’ve seen an additional one million tons to come to the market. So – and we’ve already seen an immediate impact with galvanizing orders, especially on the West Coast, improving in the last week or couple of days. We still do need to see sustainability, and that requires a positive final determination from the Department of Commerce. So we’re watching, but we’re excited about the potential for the findings there. Leon commented on our galvanizing strategy. I’ll tell you, it’s really founded on two things. One is better matching evolving customer demand and part of that is regional. The other side of this is improving capabilities and bringing new capabilities to bear to serve our customers. And that hits on your question about thinner gauge, also higher strength for us. Our galvanizing line at Berkeley is an awesome example of this. 300 – it’s a new auto galvanizing line, but it’s really set up to better serve the evolution of more auto production in the Southeast, with capabilities that our customers are asking us to bring to the market. And we have two million tons of new galvanizing capacity we’re going to bring to the market over the next – through ‘27, and it all falls into that category of better aligning with our customers’ regional demands and demand for more capabilities. So we’re extremely excited about that.

Your next question comes from the line of Tristan Gresser with BNP Paribas.

The first one is on the guidance. When you say you expect a meaningful contraction of earnings into Q4, when I look at the steel business, does that mean that the margins on an EBITDA per ton basis could fall below COVID levels? Is the market that bad? And also on steel products, you reiterated the long-term 15% EBITDA target. Is it possible you could fall short of that target in the coming quarters? And is the 15% actually achievable for next year?

Steve, let me confirm that I understand the last part of your question. What did you mean by the 15% reference?

The 15% EBITDA margin target for the steel product. So the question is twofold. First, on the steel mills and then on the steel products. On steel mills, I was more interested in the potential to break lows versus COVID on the margin side and for the steel products more on the margin, could you also fall below that level near term?

Thank you for the question, and I appreciate the opportunity to elaborate on this. The outlook for the fourth quarter at a consolidated level reflects a continuation of the trends you have observed. We won't provide specific quantitative guidance today; we will do that later in the quarter as usual. If you examine the sequential changes we have experienced over the past 18 months, you will see that we are maintaining a level of moderation. Leon mentioned earlier that the markets are not in a particularly bad position, and we continue to affirm this as we navigate through various challenges. It's important to note regarding our steel segment that we incurred $168 million in preoperating start-up costs. While some companies may adjust their earnings to exclude such costs, we do not, as these are cash expenses, and we retain them in their original form. If you consider the impact of these costs, they are tied to the significant capital spending we have undertaken and continue to pursue. So, if you're looking to normalize these figures, you need to take that factor into account.

That's helpful. And second question, a bit more bigger picture. You mentioned the higher carbon intensity of imports, and I believe there is an investigation for the U.S. ITC on carbon intensity ongoing, and the report should be delivered in coming months. So my question is simple. Do you believe there is room to see carbon-based tariffs in the U.S. in 2025?

Yes, Tristan, look, the macro, the answer is yes, I do. I think you want to level the playing field and looking at what steels are making on in the shores of the United States, absolutely. But the devil is in the details. How does the carbon border adjustment mechanism work? How does that get applied, what gets included, excluded? And again, what I would tell you is, the United States is the cleanest steel industry anywhere in the world. And if you're building future green technologies like wind and solar and advancing the digital economy with the dirtiest steels in the world, there's something fundamentally wrong with that. And so again, I love where Nucor sits in relation to that. I love our ability to offer a truly sustainable product to our end-use customers that demand that. But I do think it is time to rationalize and recognize that many of the steels that are finding their way into the United States are not anywhere close to the levels of carbon intensity that we can currently make and that we're going to continue to trade and develop as we move forward.

This is Greg Murphy. If I may add one thing. We applaud the efforts of the ITC to try to gather meaningful data. What we really need is we need complete and total transparency if we’re going to establish policy based on a quarter adjustment mechanism. And so Nucor is, of course, actively participating in that process.

Your next question comes from the line of Carlos De Alba with Morgan Stanley.

Could you provide more details on the steel mill guidance for the fourth quarter? Specifically, do you expect to see more softness in long steel products compared to flat steel products? Any insights would be appreciated.

Okay, Carlos, yes, I'll kick it off. This is Leon. Maybe ask Randy or Brad to comment on the longs. But look, as we look at the backdrop of where our import levels were over the last year, it's just too high. Again, we applaud the cores case, but there are others that need to continue to get refined as we've looked at our NAFTA trading policies. We look at USMCA with Mexico, rebar imports out of Mexico are up 1700% more than the averages of 2015 and '17. So again, these are meaningful additions to the overall marketplace. And again, you saw that reflected in our group pricing announcement to provide some transparency and relativity to the market. However, as I say all that, and the fundamentals and the demand picture aren't bad. They're really not. We're seeing some of our backlogs improve slightly. But historically, and we shared this many times on this call, our longest products are consistent and reliable earning money-generating businesses that we have that continues to be the case. But they're not immune from some of the downward pressure. However, again, those prices are still compared to prepandemic levels, much, much, much healthier than they were in what we saw not 4, 5, 6 years ago. So the outlook, again, demand picture-wise, isn't too far off, maybe 1% or 2% depending on specifics. But the flow-through of those pricing as we move from the bottom into a more sustainable market into the end of the year into 2025. Again, I think what Steve showed earlier is you can expect that those steel mill segment earnings are going to be off from Q3. But Randy or Brad, any comments you'd like to take on the longs?

Yes. Thanks, Leon, and thank you for the question. Leon covered it well. Obviously, what I would add to that, certainly from a rebar standpoint, we anticipate to sustain growth in that business propelled by the continued investment in our infrastructure, the reshoring of manufacturing, and we would continue to see the energy transition and the transmissions build out. Keep in mind that, again, our long product is the most diverse product portfolio of any steel company. There's market today from an MBQ standpoint that continues to be strong, whether that's our racking manufacturers, metal buildings, or in trailer manufacturing all giving us order and signs that demand remains strong in advanced manufacturing. So we remain very excited about the potential as we move into 2025 and as we continue to see interest rate cuts in the continued pace in that space that we are positioned well to take advantage of those opportunities.

I can provide insights on the structural side. Demand in structural has been quite stable year-over-year, remaining fairly even. There is, of course, a slight decline in vertical construction and warehousing, but we are witnessing considerable strength in government projects, schools, stadiums, data centers, advanced manufacturing, and hospitals. Overall, ADC is relatively stable. The key issue lies with imports, as Leon mentioned. Imports have increased by 23% year-over-year, and fabricated structural imports have more than doubled since 2020. This is where we are experiencing pressure on pricing.

Yes. Carlos, this is Steve. One thing I'd just add to what the group has already said here is, and we mentioned this in our opening remarks, there's a certain amount of seasonality that affects longs and flats. Your question is about longs or flats, but another thing to remember is that most of our sheet steel sales are on a contract basis. So there is a certain lag effect to when you see us have realized prices in our financial results versus changes that you might see in the marketplace.

Right. Great. Can you provide any high-level qualitative comments on the level of volumes, pricing, or margin that you're seeing in the order book for the steel products that extends through the first quarter of next year?

Yes, Carlos, I'll ask John Hollatz to comment. And obviously, we're not going to touch on pricing, but we can give you a good picture into what we see end of the year and how Q1's shaping up in products.

Yes, Carlos, this is John. Thanks again for the question. Our downstream backlogs are nearly even with what they were in the third quarter. So we do expect that will carry us into the fourth quarter; I'm sorry, into the first quarter of 2025. We do expect we'll see a reduction in shipments as we move through the fourth quarter just due to the seasonality. And keep in mind that geographically, we have coverage all across North America. So as the weather changes, we feel the impact of that. And there will be some margin compression just due to moderation in some of our market segments, as we mentioned in our opening comments.

And one thing I think it’s important to emphasize is that Nucor remains uniquely positioned as our downstream businesses pull through more than 20% of our overall steelmaking output creates a base load of demand from our own mills in addition to the earnings generated by our downstream businesses that a lot of our other competitors don’t have that available to them.

Your next question comes from the line of Alex Hacking with Citi.

I guess first question, the $168 million of start-up costs in the quarter, is that exclusively in the mill segment? And can you give us a sense of how much of that relates to Brandenburg?

Yes. Alex, thanks for the question. This is Steve. And the overwhelming preponderance of cost there does relate to steelmaking, and I won't give you a specific number for Brandenburg, but it correlates to the capital spending. No surprises there. And having just completed Brandenburg, it may not surprise you to know that, that's the largest single driver in the number in the quarter. Between West Virginia and Brandenburg, those two divisions account for the vast majority, over three-quarters of the $168 million for the quarter.

Okay. And I apologize if I missed this earlier, but do you have any target for when Brandenburg is going to breakeven? And then just kind of a follow-up on that. On plate demand, what are you seeing on the wind farm side as we head into 2024? I know we're seeing a lot of cancellations on offshore, but onshore appears to be stronger.

Yes, we absolutely have targets, none of which we've shared publicly. But yes, we absolutely have targets. What I would tell you and Brad can add some more. And I don't think you mentioned this earlier, Alex, is Brandenburg has achieved EBITDA positivity. So we are looking and we'll continue to look for that as the volumes increase. And again, the capability of that mill provides an incredible backdrop of additions to our Hertford County and Tuscaloosa play mills that, again, provide a really strong pull-through both the smaller sections in terms of thickness as well as the broader. But, Brad, anything you'd add?

Yes. Just for clarity, we’ve said on the last call, we’ve achieved EBITDA breakeven run rate by the end of the year. From a melt and cast perspective, from a rolling perspective, we actually achieved that in September. So we still are confident in achieving that more sustainably by year-end. I think your other part of your question was on wind. We are seeing a pretty decent step-up in quoting activity and order activity for onshore wind. Offshore wind, as you know, supply chain in the U.S. hasn’t materialized yet. That said, we are seeing interest from European offshore wind and monopile producers for Elcyon plate out of Brandenburg, in fact, we received our first order for that in Q3. So we’re excited about the opportunity to supply the European producers until that supply chain gets built out in the U.S.

Your next question comes from the line of Katja Jancic with BMO Capital Markets.

Regarding CapEx, a few quarters ago you stated that in 2025 your CapEx spending would remain above $3 billion. Is that still the case? How should we view CapEx for next year?

Thanks for the question, Katja. We will provide more precise quantitative guidance at the Q4 call as we do every year due to our current annual budget process. However, based on the large capital projects we have publicly announced, you can expect our spending to remain around the $3 billion level, possibly a little above or around that for the next year or two. This is primarily due to the larger projects. We will certainly provide more detailed information during the earnings call.

Well, Katja, it’s Leon. What I would tell you is we’re always doing that. We have an incredible breadth of capability sets that provide the market what it needs when it needs it. And so we’re monitoring those trends and watching where is it best to produce certain products, but it’s not – we’re not adding Virginia because we’re thinking of years to come. We don’t have – or one of the sheet mills will get idle, that’s never how we think about growth. It’s what is the capability differentiator that we can supply into the markets. But in smaller moves, yes, we’re always internally rationalizing where is the best footprint to produce a product, where is the customer located? Do we save on freight? How do we best execute on the long-term value-added strategy that we have? So that’s something that we always do. But it’s not in the frame of we’re going to build x plant to close y plant. That’s never our mindset.

Your next question comes from the line of Bill Peterson with JPMorgan.

If we're going to come back to the fourth quarter seasonality for both mills and products, considering some of the pauses you outlined before. I think in the last 10 years, maybe ex COVID seasonality would be like down 6% for mills, maybe down 10% for products. Given these positive, should we assume that the magnitude could be larger than that? And then if so, given the sort of holding pattern we're in, in looking at your order entry, can we think about maybe a better than seasonal first quarter given the comments that you had that the demand environment really isn't that bad fundamentally?

Bill, I'll touch on it. But certainly, John, Randy, Brad, if there's some commentary you'd like to share. But look, to answer your question, I got to speculate and I don't want to speculate. I don't want to begin predicting well if so and so gets an office and we see this tax relief or that trade policy. What I would tell you is, no, we're not predicting seasonality to be any more severe than we did a year ago. I think you would see a normalized seasonal response for Q4, late part of the year into 2025. And then again, there are some tailwinds that we know are going to come through. Timing of that? And I have to speculate. When do we see more meaningful infrastructure spending? When do we see more meaningful IRA spending flowing through the order books? And again, I don't want to speculate. I would just tell you that is yet to come. And again, those packages are not insignificant. And what's the Fed do with rates? And do we see that continue easing to elicit more spending in the back half of the year and into early Q1? Again, I think that's likely, I don't want to speculate on percentages or volumes that we anticipate. Guys, anything you'd add to that?

Yes, Bill, this is John Hollatz. It's maybe one indicator of market stability that's specific to our joist and deck businesses. For the last four quarters in a row, our entry rates across the industry have been very consistent. We feel like that market is in a stable spot, which should give some indicators that as we continue to see quote levels remain consistent as well, that gives us some confidence moving forward. But again, to Leon's comments, you don't want to get into speculation of things that are that far out right now.

Yes. Maybe tying to an earlier question on carbon intensity, especially in the context of imports. But I guess it's been a while since you've had an update from you on your own sort of decarbonization efforts we've seen a push from nuclear energy, especially from data center operators. What's the status of your investment in nuclear with NuScale and maybe other forms of low carbon energy, your CCS program for the DRI plant, just things of that nature, if you could provide an update on these longer-dated projects.

Yes, Bill, thanks for that. I'll start and then ask Greg to discuss some specifics. Nucor holds several advantages, particularly having a carbon footprint that is among the best in the industry. As a leader, we are committed to transparency regarding our Scope 1, 2, and 3 emissions. Earlier, Greg mentioned our collaboration with the administration on the C BAM. To ensure a fair competitive environment, it's crucial to apply a meaningful border adjustment based on accurate knowledge, rather than comparing integrated steelmaking with EAFs, as our carbon footprint gives us a significant market edge desired by many of our end-use customers. Looking ahead, our investments in NuScale and Helion highlight the importance of energy in rebuilding the nation, transitioning to a greener economy, and digitalizing it. The demand, especially from data centers, is remarkable. Hence, we need more than just wind and solar; nuclear energy must play a role as well. Our investment in NuScale supports the advancement of small modular reactor technology, which is already commercialized in other regions and needs to be here in the U.S. We're also enthusiastic about Helion's progress in fusion technology and their plans for rapid deployment. These investments position us to build energy-efficient stations in our new order plants. While we won't be producing electricity ourselves, we aim to utilize our consumption efficiently and potentially export surplus energy back to the grid, creating a significant advantage for Nucor. We will closely monitor this development, which explains initiatives like Constellation and Microsoft's plan to restart Three Mile Island. The future energy demand will be huge, and we anticipate further investments in this area. Greg, would you like to add details on some specific outcomes?

Yes. No, I think that covers it really well in terms of our strategy. Nucor's approach has always been a very multifaceted approach. We start with the greenhouse gas intensity in all three scopes. It's about one-third of the global average for integrated steelmaking. So the real opportunities for us do lie in our material strategies and then also in our energy strategies. Our projects with NuScale and with Helion are certainly advancing, but some of the announcements recently by hyperscalers to invest in other small modular reactor technologies is also exciting because what we really need as a nation is we need to advance that technology and whatever form takes. The other thing is, I think large-scale nuclear power definitely needs to be a part of our energy future. And so the efforts to bring back online, curtail nuclear power plants that are performing functionally well, and then the ability to sort of take the lessons learned from other large-scale nuclear reactor power plants and then begin to build them out at scale and develop a very reliable supply chain. All those things are really going to be important. The last thing I would mention because you asked about was our carbon capture project with ExxonMobil. We're still moving forward with that full steam ahead. We're excited to actually get to the point where we're injecting CO2 from our DRI facility, our direct reduced iron facility in Louisiana. And when we do that, we'll already take a very low and body carbon high-quality metallic and we'll reach the point where we have some of the lowest carbon raw materials available anywhere in the world today.

But I could add just one more comment on that. You asked about where we’re moving with that or you wanted an update. We have a lot of irons and fires, and we just – not at this point, we can talk about those. So we are certainly pushing forward into doing what we can to create the grid.

And that is all the time we have for questions. I would like to turn it back to Leon Topalian, our CEO, for closing remarks.

Thank you so much for all the questions generated in the last hour. I want to leave you with this: Nucor continues to be a strong, resilient, growth-focused company built for the long run. We maintained an incredibly strong balance sheet, which allows us to proceed with our projects through every phase of the cycle. But we're not operating with blinders on; we keep our fingers on the pulse of this dynamic industry and make necessary changes in response to changing circumstances, especially when it comes to our prudent capital allocation. It's what built Nucor into the largest and most diversified steel producer in North America and is what will continue to keep us out front for decades to come. Closing, I want to thank our Nucor team, customers, and shareholders for the trust you place in us and thanks for taking the time to join us this morning. We look forward to connecting again soon.

Thank you. And ladies and gentlemen, this concludes today's conference call. Thank you all for participating. You may now disconnect.