Nucor takes aim at costs, auto

Nucor plans to navigate the upcoming surge of Covid-19 capacity restarts by keeping its costs low, Kallanish learns from the company’s second-quarter earnings call with analysts. 

Ceo Leon Topalian estimates that about 13 or 14 blast furnaces that were taken offline during the pandemic will return by August, or about 10 million short tons of capacity. 

That still leaves a further 10m st offline, he says – and some of that may never come back. 

“What I would tell you is the ultimate driver is the low-cost producer wins,” he says. “And so Nucor’s focus and taking care of our team from a safety perspective is also matched by ensuring that we remain in a low-cost position so that we can continue to be the supplier of choice and/or market share.”

Growth in the auto sector is also becoming a sharper focus for Nucor in the age of Covid-19, he says. 

“While we’re not GM’s or Ford’s or BMW’s or Mercedes’ Tier 1 biggest supplier, we’re working hard every day to be their best supplier,” he says. “So even though auto will be down this year and really probably for the next year in terms of pre-Covid levels, our share of that opportunity is going to grow. And we think by the end of the year, we will surpass the shipping level of what we did in 2019.”