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North America Steel Industry Analysis Summary

Core Content

This document provides an updated analysis of the North American steel industry, focusing on three major companies: Nucor Corp (NUE), Steel Dynamics (STLD), and Cleveland-Cliffs (CLF). It includes revised earnings estimates, steel price forecasts, and insights on trade policy and new capacity developments.

Main Points and Key Information

Updated Earnings Estimates

• Nucor Corp (NUE)

  • 2Q25 EPS: $2.31/sh (vs FactSet consensus $2.25/sh)
  • 2025 EBITDA: $4.4bn (up 23% from previous estimate)
  • 2026 EBITDA: $4.8bn (up 2%)
  • Target Price (TP): $150/sh = 7-8x normalized EBITDA of $5.3bn

• Steel Dynamics (STLD)

  • 2Q25 EPS: $2.63/sh (vs FactSet consensus $2.72/sh)
  • 2025 EBITDA: $2.3bn (up 7%)
  • 2026 EBITDA: $2.7bn (up 7%)
  • TP: $150/sh = 8x normalized EBITDA of $3.2bn

• Cleveland-Cliffs (CLF)

  • 2Q25 EPS: -$0.71/sh (vs FactSet consensus -$0.56/sh)
  • 2025 EBITDA: -$0.02bn (up 19%)
  • 2026 EBITDA: -$0.017bn (down 5%)
  • TP: $7.50/sh = ~5x normalized EBITDA of $2.0bn

Steel Price Forecasts

• HRC (Hot-Rolled Coil):
  • 2025 average price: $869/st (up 3% from previous forecast)
  • 2026-2027 average price: $850/st (unchanged, reflecting diminishing returns from S232 tariffs)
• CRC (Cold-Rolled Coil): $1,106/st
• HDG (Hot-Dipped Galvanize): $1,181/st
• Plate: $1,151/st
• Rebar: $806/st

Trade Policy and Imports

• In 2024, the U.S. imported 26mt of steel, with ~80% tariff-free under S232 quotas.
• Quotas were eliminated in March 2025, but may return in upcoming trade deals with key partners like Canada, Mexico, EU, Japan, Korea, and Brazil.
• Imports outside quotas are subject to 50% S232 tariff, up from 25%.

New Capacity in 2025-2026

• Sheet:
  • BRS2: 3mt sheet mill ramping up
  • NUE Indiana: 300kt coating, 300kt galv, 250kt pre-paint in 4Q25
  • NUE Berkeley: 500kt galv line in mid-2026
  • STLD Sinton & Terre Haute: 300kt coating, 300kt galv, 240kt pre-paint in 4Q25
• Rebar:
  • Hybar: 600kt rebar mill in 3Q25
  • NUE Lexington: 430kt rebar mill in 3Q25
  • CMC Berkeley: 500kt rebar mill in late 2025

Market Conditions

• Steel shipments remained robust in 2Q25 (excluding auto) but may face risks from destocking once trade policy stabilizes.
• Underlying steel demand is considered tepid, but could improve in 2026+ with trade uncertainty resolved and potential Fed cuts.

Summary of Key Trends

• Steel Prices: HRC prices are expected to rise in 2025 due to tariff support, while remaining stable in 2026-2027.
• Earnings Outlook: NUE and STLD are expected to show strong sequential improvements in EPS and EBITDA, while CLF faces challenges with negative EPS and EBITDA.
• Capacity Expansion: Significant new capacity is expected in the sheet and rebar segments, which could affect market dynamics.
• Trade Uncertainty: Ongoing trade policy uncertainty is a key risk factor, with potential for improved demand once it stabilizes.

Tables Summary

Earnings Estimates Table

• Includes Last Reported Year, Current Fiscal Year, and Next Fiscal Year estimates for each company.
• NUE and STLD show positive revisions, while CLF shows mixed results.

Steel Price Forecasts Table

• Provides historical and forecasted prices for various steel products, including HRC, CRC, HDG, Plate, and Rebar.
• Highlights the impact of S232 tariffs on pricing and demand.

Trade Policy and Import Overview Table

• Summarizes U.S. steel imports by country and the impact of S232 quotas.
• Notes the potential return of quotas in key trade deals, which could affect import volumes and pricing.

Capacity Developments

• Lists new capacity additions for each company in the sheet and rebar segments, including timing and expected output.

Conclusion

The analysis suggests that the North American steel industry is navigating a complex landscape with trade policy uncertainty and evolving pricing dynamics. While NUE and STLD are expected to benefit from higher steel prices and strong order entry, CLF faces ongoing challenges with negative EBITDA and EPS. The potential stabilization of trade policy and the resolution of uncertainty are seen as catalysts for improved demand and performance in 2026+.