Nucor's Steel Mills Shipments Climb: Can Margins Hold in Q3?

Nucor Corporation NUE saw higher shipments in its steel mills segment in the second quarter, underscoring strong customer demand and operational efficiency. Its total steel mill shipments in the second quarter rose 10% year over year to 6,474,000 tons, driven by higher shipments across sheet, bars and plate products. Total sales tons to outside customers for steel mills were 5,044,000 tons, up 9% year over year. 

Overall operating rates at the company's steel mills increased to 85% in the second quarter of 2025 from 80% in the first quarter of 2025 and 75% in the second quarter of 2024, reflecting higher utilization. Higher shipment volumes and average selling prices led to increased earnings for the steel mills unit in the second quarter.

Shipments at the Brandenburg plate mill rose for the sixth straight quarter.  Brandenburg achieved positive EBITDA in the second quarter, riding on strong shipments. 
 
However, Nucor’s third-quarter outlook indicates margin compression in steel mills. The company expects sequentially lower profitability in the segment on stable volumes and prices. The expected downside in earnings is despite firm demand from key end markets and a healthy order backlog. Compression is anticipated in the sheet operation, offset by continued growth at Brandenburg.

Among its peers, Steel Dynamics, Inc. STLD registered steel shipments of roughly 3.3 million tons in the second quarter, up nearly 5% year over year. Steel Dynamics’ steel mills operated at a utilization rate of 85% in the quarter. The high utilization reflects Steel Dynamics’ value-added steel product diversification, differentiated solutions and strength in its manufacturing businesses.

Cleveland-Cliffs Inc. CLF achieved record steel shipments in the June quarter. Cleveland-Cliffs’ external sales volumes for steel products were roughly 4.3 million net tons in the second quarter, up around 7.5% year over year. Cleveland-Cliffs expects shipment volumes to be stable sequentially in the third quarter.

NUE’s Price Performance, Valuation & Estimates

Nucor has gained 27.4% year to date against the Zacks Steel Producers industry’s rise of 23%.

From a valuation standpoint, NUE is currently trading at a forward 12-month earnings multiple of 14.88, a roughly 37.7% premium to the industry average of 10.81X. It carries a Value Score of B.

The Zacks Consensus Estimate for NUE’s 2025 and 2026 earnings implies a year-over-year decline of 7.3% and an increase of 31.4%, respectively. The EPS estimates for 2025 and 2026 have been trending higher over the past 60 days.

NUE stock currently carries a Zacks Rank #3 (Hold). 

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This article originally published on Zacks Investment Research (zacks.com).

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