Nucor Wins An Entire GM Platform For Exposed Auto Sheet: 'It's Over'
CEO Leon Topalian says electric-furnace steel has cleared the last hurdle against integrated mills, with qualification shifting to West Virginia.
Nucor, which makes steel and steel products in electric arc furnaces that melt mainly scrap, has been awarded an entire General Motors platform for exposed automotive sheet, Chair and CEO Leon Topalian said on the company's third-quarter earnings call Tuesday. Exposed panels, the visible skin of a car, were what he called "the last bastion of the integrated competition."
"It's over" for the doubters
Answering a BNP Paribas analyst's question on auto strategy, Topalian said he wanted to "fully blow apart any notion that EAF's do not have the technical and quality capabilities" to make exposed panels. Listeners, he said, "can fully dismantle any notion" that electric-furnace producers cannot make the most complex exposed pieces of a vehicle.
He was blunt about what comes next: "it's over we're on it we're doing it," and Nucor will keep taking share "away from the integrated producers period full stop."
CFO Jack Sullivan said Nucor would aspirationally like a bigger chunk of the GM platform but is starting with certain parts. He credited the patience of the team and investors over the journey.
West Virginia carries the qualification load
The qualification work, including process engineering, quality control and the production part approval process, is now moving to Nucor's new West Virginia sheet mill, Topalian said. Once ramped, the mill will produce 30 percent automotive steels.
Noah Hanners, executive vice president of sheet products, said auto tons begin qualification there in 2028. Auto is "about 10% this year," he said, and West Virginia will do about a million tons once ramped, probably 10% of it going to exposed auto.
COO Steve Laxton said the mill's first coils through the hot mill, cold mill and construction-grade galvanizing lines are expected by December, with ramp-up in early 2027 toward 50% utilization by the end of 2027.
Berkeley line and auto shipments
A new automotive-grade galvanizing line at Berkeley, South Carolina began production early this month. Laxton expects it to reach 50% utilization in the second quarter of next year and, at full production, to add 500,000 tons of annual galvanizing capacity. Hanners said Berkeley was the substrate mill for the GM qualification.
Laxton said Nucor's flat-rolled shipments to automotive customers are up 4% year to date while North American auto production is essentially unchanged. He added that Nucor recently commercialized exposed-quality galvanized steel for an SUV's exterior panel using thin slab casting.
Nucor's steel mills shipped more than 7.2 million tons in the third quarter, a record for the third consecutive quarter. Net earnings were $1.3 billion, or $5.80 per share.
Nucor's market value stood at $58.4 billion in Tuesday trading, and the company's next update on 2027 capital plans is due on its year-end call in January.
Sources
- Nucor (NUE) Reports Q3 Earnings: What Key Metrics Have to Say — Yahoo Finance
- Nucor (NUE) Q3 Earnings and Revenues Top Estimates — Yahoo Finance
- EX-99.1 — sec.gov
- Nucor Shakes Off Q3 Miss As Steel Prices Hit 4-Year High | Investor's Business Daily — investors.com
- Nucor Non-GAAP EPS of $4.84 misses by $0.99, revenue of $11.25B beats by $460M (NYSE:NUE) | Seeking Alpha — seekingalpha.com
