Nucor Corporation (NYSE:NUE) Q2 2019 Earnings Conference Call - Final Transcript

Jul 18, 2019 • 02:00 pm ET

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Nucor Corporation (NYSE:NUE) Q2 2019 Earnings Conference Call - Final Transcript

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Q & A
Operator
Operator

Thank you. The question-and-answer session will be conducted electronically. (Operator Instructions) We'll take our first question from Martin Englert with Jefferies.

Analyst
Martin Englert

Hi. Good afternoon everyone.

Executive
John J. Ferriola

Good afternoon.

Analyst
Martin Englert

Within the raw materials, you pointed towards the lower sequential results into 3Q and further margin compression in DRI. Do you expect the overall segment to remain profitable and could you also talk about your material sourcing strategy given the upcoming, I think, you said it was a 65 day outage, correct?

Executive
James D. Frias

We don't disclose specifically which business units are going to be profitable, but overall we expect the Raw Material segment to be profitable. And John, do you want to talk about...

Executive
John J. Ferriola

I'll address some of the other -- the other issues. You mentioned about sourcing. We have several sources. You know, that there's some challenges in the iron ore marketplace right now, but we have solid secured deliveries coming in. We're not worried about that. Pricing is a bit of a challenge right now because of some of the things that are going on and -- but we feel good about the rest of it being able to get what we need and when we need it.

Executive
James D. Frias

I think the sourcing question is about us getting something to replace the DRI for our mill shops.

Executive
John J. Ferriola

Oh, is that what you're looking for Martin?

Analyst
Martin Englert

Yeah, more along the lines. While you have this outage of even pre-building any DRI pellet inventory or you importing any prime scrap, I guess. So what's the strategy there?

Executive
John J. Ferriola

We've built some inventory, but you know, we have -- one of the great things about our raw material strategy overall is the flexibility of it. And we have the D.J. Joseph team that's been able to go frankly, globally to secure any scrap that we need, you know prime or obsolete. We have great sources of HPI that we can bring in, again from David J. Joseph, and we have great sources of pig iron that we can bring in. So we are not at all concerned about being able to get the virgin iron units that we need to maintain, producing the ultra high-strength steels during this period of outage from the DRI plants.

Analyst
Martin Englert

Okay. Excellent. Thanks for the color there. And if I could one other quick follow-up. There have been several recent flat-roll price increases introduced. Can you discuss how that's been received by the market and any change in the order book since that was introduced?

Executive
John J. Ferriola

Well, there's been two that have been introduced. The first one was maybe was three weeks ago -- three weeks ago and we were able -- it's $40 and we were able to get all $40 of that $40. The second one was just about a week ago, and it's really too early to tell too much about how much we'll get of that $40 but the initial week looks encouraging. We're also encouraged by the fact that as a result of these increases, we've seen an increase