Nucor Corp. (IW 500/68) sees its growth ambitions getting a tailwind from U.S. trade cases that limit imports from countries such as China.
The largest U.S. steelmaker is seeking new platforms in different products and countries, Nucor Chief Executive Officer John Ferriola said Tuesday. The company has breathing room to expand thanks to the success of trade cases, but its strategy isn’t dependent on the success of the cases.
“We have a strategic plan for profitable growth that we are going to act on,” Ferriola said in an interview at Bloomberg’s headquarters in New York. “Certainly, the trade cases help our profitability.”
The shares of Charlotte, N.C.-based Nucor have climbed 18% this year as demand increased and the U.S. implemented anti-dumping measures on steel imports from countries including China. At the same time a benchmark of U.S. steel prices surged 36%, helped in part by the trade cases.
Last month the U.S. Commerce Department found subsidies on China cut-to-length plate and dumping margins on imports of stainless steel sheet and strip in preliminary determinations, adding to the final determinations of corrosion-resistant, cold-rolled steel and hot-rolled steel products previously announced by the department and the International Trade Commission.
Nucor said last month that its earnings prospects may improve further as more trade cases conclude. The company said it expected third-quarter earnings will increase because of the positive impacts of lower flat-rolled steel imports, rising steel prices and “robust” demand for cold-rolled and galvanized sheet products.
Capacity utilization, which measures the amount that U.S. plants are in use, has climbed 14% this year as demand increased and companies regained market share from overseas producers.
Ferriola said that while the company has grown organically, it’s open to acquisitions.
Investment Brings ‘Best Return’
“We believe that investment in our existing facilities always gives us the best return,” Ferriola said. “Acquisitions are great opportunities to get into new business we aren’t into today or supplement new products business that we aren’t into.”
Ferriola said he doesn’t favor either Democratic presidential candidate Hillary Clinton or Republican Donald Trump, but he hopes whoever wins the election will follow through on pledges to implement infrastructure projects during the next administration.
He called 21st Century infrastructure essential to a robust economy and criticized the current state of affairs in the U.S.
“It’s embarrassing,” the New York-born CEO said, mentioning as examples Manhattan’s West Side Highway and aging bridges. “Anyone who wants to argue whether it’s crumbling in this country just needs to look.”
By Joe Deaux