PREVIEW-US steelmakers eye mixed second quarter despite tariff-led price spikes
By Aatreyee Dasgupta
July 18 (Reuters) - Top U.S. steelmakers' second-quarter fortunes are likely to be a mixed bag, caught between a fillip from higher steel prices and uneven demand amid uncertainty over U.S. President Donald Trump's tariffs.
In its mid-quarter update, Nucor NUE.N forecast second-quarter profit ahead of analysts' estimates compiled by LSEG, citing higher average selling prices across its steelmaking segments, especially sheet and plate mills that produce flat-rolled products used in construction, automotive, manufacturing, agriculture and energy sectors.
Nucor's higher shipments and steady pricing could be attributed to a "more diverse footprint," J.P. Morgan analysts said in a note.
Steel Dynamics STLD.O, meanwhile, projected its profit below analysts' estimates on lower flat-rolled volumes due to an inventory overhang. It also forecast lower earnings from its fabrications business on higher input costs.
After an initial spike in steel prices as buyers stocked up after Trump on February 2 first floated steel tariffs, constant flip-flops eventually slowed demand.
The increase was moderate due to growing domestic supply, while demand has weakened due to seasonality and tariff uncertainty, BMO Equity Research said in a note.
Trump's plans to double tariffs on U.S. steel and aluminum imports to 50% from the current 25% have hiked costs for buyers and hit manufacturing.
Further, the impact of higher prices may not immediately figure in companies' earnings, since producers operate under fixed price contracts spanning months, and analysts expect benefits may show during the third quarter.
"While tariffs may push spot prices higher, those increases are slow to flow through to earnings," said Raul Munoz, managing director at insurance broker Marsh.
Analysts expect spot prices to remain range-bound over the summer.
"We believe some of the recent resilience in steel prices will lead to higher 3Q earnings revisions due to the prolonged impact of import tariffs," Jefferies said.
Steel Dynamics will report results on July 21 and Nucor on July 28.
North American Steel Prices
Steel Dynamics and Nucor have largely outperformed the S&P 500 index this year
Related Articles
September Fed Watch: A Policy Pivot That Could Make or Break the Bull Stock Market
TradingKey - The Fed’s September FOMC meeting is widely seen as locking in the first rate cut of 2025. Yet strategists at Morgan Stanley, JPMorgan, and Oppenheimer warn that as investors shift focus to slowing growth, a more cautious tone may replace bullish stock sentiment.
Meta Connect 2025: An Inflection Point for AR Wearables?
TradingKey - Meta Connect 2025 kicks off this Wednesday, and expectations couldn’t be higher.
Effects of Interest Rate Cuts: Impact of Fed's September Meeting on Crypto Market
The Fed’s rate cut decision is a major bullish catalyst for crypto — but it comes with uncertainty. Investors should understand the economic rationale behind the move and adjust strategies accordingly. Staying flexible, informed, and disciplined is key to thriving in crypto’s fast-moving environment
Japan Q2 GDP Commentary: Growth Revised Upward, Yen May Rise
TradingKey - On 8 September 2025, Japan released the revised Q2 GDP figures. The data showed that real GDP grew by 0.5% quarter-on-quarter, surpassing market expectations of 0.3% and the previous quarter’s 0% growth.
Fed to Cut Rates: All Asset Prices Up!
TradingKey - The Federal Reserve is almost certain to restart its interest rate cut cycle on 17 September this year. After in-depth research, we have concluded that cryptocurrencies, the broader U.S. stock market, and short-term U.S. Treasury bonds will all go up.
