Good day, everyone, and welcome to the Nucor Corporation first quarter of 2022 earnings call. As a reminder, today's call is being recorded. Later, we will conduct a question-and-answer session, and instructions will come at that time. Certain statements made during the conference will be forward-looking statements that involve risks and uncertainties. The words we expect, believe, anticipate, and variations of such words and similar expressions are intended to identify those forward-looking statements, which are based on management's current expectations and information that is currently available. Although Nucor believes they are based on reasonable assumptions, there can be no assurances that future events will not affect their accuracy. More information about the risks and uncertainties relating to these forward-looking statements may be found in Nucor's latest 10-K and subsequently filed 10-Qs, which are available on the SEC's and Nucor's website. The forward-looking statements made in this conference call speak only as of this date, and Nucor does not assume any obligation to update them, either as a result of new information, future events, or otherwise. For opening remarks and introductions, I would like to turn the call over to Mr. Leon Topalian, Chief Executive Officer of Nucor Corporation. Please go ahead. Good afternoon, and welcome to our first quarter earnings call. I'd like to begin the call by introducing our new Chief Financial Officer, Steve Laxton. During the first quarter, we announced the retirement of Jim Frias and the appointment of Steve to the role of CFO. Steve began his career in Nucor in 2003 and has spent the last eight years as our Vice President of Business Development. We're excited for Steve's future as CFO and welcome him to the executive team. You'll be hearing from Steve in a few minutes about our first quarter financial performance. I'd also like to take the opportunity to thank Jim Frias for his 30 years with Nucor. He has had a tremendous impact on me, our team, and our company, and we wish Jim and his wife, Sharon, and family the very best in his upcoming retirement. Also joining us on the call today are members of the Nucor executive team, including Dave Sumoski, our Chief Operating Officer, Al Behr, responsible for plate and structural products, Doug Jellison, responsible for raw materials and logistics, Greg Murphy, responsible for business services and our general counsel, Dan Needham, responsible for bar, engineered bar and rebar fabrication, Rex Query, responsible for sheet and tubular products, MaryEmily Slate, responsible for our enterprise commercial strategy, and Chad Utermark, responsible for fabricated construction products. Last year, we achieved record safety performance, beating the safety record we set in 2020, and the Nucor team is off to another strong start in the first quarter of 2022. We continue to see excellent safety performance across our divisions as our teams work to meet strong demand from our customers. I'm proud of our team's commitment and progress toward achieving our goal of becoming the world's safest steel company. Team, together, let's set another record in 2022. Turning to our financial performance, we achieved record first quarter results with earnings per share of $7.67. The quarter was marked by pronounced volatility as Russia's invasion of Ukraine impacted commodity markets and the supply chains of nearly every industry. While the Ukraine-Russia conflict certainly is having an impact on our industry, the much larger concern is the humanitarian disaster that has unfolded in Ukraine. The images coming out of Ukraine are heartbreaking, and our thoughts and prayers are with the Ukrainian people who continue to endure significant suffering due to the invasion. The onset of the pandemic in March of 2020 and the Russian invasion of Ukraine are two recent events that upended markets and showed the resilience and sustainability of our business model. Our flexible production process and diversified product portfolio have helped us to thrive in the volatile market conditions that followed. I'm extremely proud of how our Nucor team has navigated the pandemic and several unexpected supply chain disruptions over the past two years. We are on the cusp of completing $4.1 billion in strategic organic growth investments by the end of 2022. We have also completed $2.1 billion in strategic acquisitions and returned approximately $4.8 billion in capital to our investors through the last five quarters. Our balance sheet remains under-levered, and we have a fresh series of new organic growth initiatives that are just getting underway. Nucor delivered breakout record performance in 2021, and now we're beginning 2022 with a new quarterly record, which we expect to surpass again in the second quarter. Our team's ability to navigate the current disruption to the seaborne pig iron markets highlights the benefit of Nucor's powerful and adaptive business model. Pig iron makes up roughly 10% of Nucor's overall metallic supply in a typical year. Russia and Ukraine have historically accounted for over half of that supply. However, at the outset of this war, we immediately ceased all purchases of pig iron and any other raw materials from Russian suppliers. We could do this without disrupting customer supply or quality because we have worked over the years to effectively manage the risks related to our raw material needs. While we have not been able to source material from Ukraine since the war began, we look forward to partnering with our Ukrainian suppliers when conditions in the region permit. We have several advantages that are enabling us to manage through this disruption, including good long-term relationships with numerous pig iron producers globally. Reliable DRI production capabilities in Trinidad and Louisiana that are particularly helpful in this environment. The ability to increase our production of low copper shred and to continue to invest in additional technologies for high-quality metallics, especially those that can help us further reduce Nucor's carbon footprint. Our DJJ brokerage arm that has once again proven its value as it utilizes its broad network to ensure our steel mills have the scrap they need to meet our customers' requirements. Turning to current market conditions, we continue to see robust demand across the key end-use markets we serve. Some markets, like automotive, continue to be constrained due to supply chain issues. Last year, we realized outstanding results despite key markets such as automotive and energy being challenged and well below their averages and our initial expectations. The first quarter of 2022 was similar, with very strong overall demand despite continued supply constraints, production challenges in automotive, and relatively tepid response for energy products despite strong pricing for hydrocarbons. Now let me provide a quick update on some specific growth initiatives. During the first quarter, we completed our acquisition of a majority stake in California Steel Industries. As we've discussed on our last call, this $400 million investment expands our geographic reach in the sheet market to the West Coast, grows our portfolio of value-added sheet products, and creates supply chain efficiencies with Nucor's downstream businesses in the region, including Verco and Hannibal Industries. We welcome CSI teammates to our Nucor family. We also announced plans to modernize and expand the product capabilities of our sheet mill in Crawfordsville, Indiana, by adding a construction-grade continuous galvanizing line and pre-paint line. The construction-grade continuous galv line will have a capacity of 300,000 tons per year, while the pre-paint line will have an annual capacity of 250,000 tons per year. Crawfordsville was our first sheet mill, pioneering EAF thin slab casting. These projects in Indiana will enhance Crawfordsville's ability to competitively serve the regional construction market. Earlier this month, we announced plans to build our third rebar micro mill in Lexington, North Carolina. We have had great success with our micro mills in Missouri and Florida and saw a real opportunity to supply rebar to the fast-growing region between Washington and Atlanta. Population growth in this region, along with the new federal infrastructure spending, is increasing rebar demand. The site in Lexington is near abundant scrap supplies and transportation corridors, allowing us to efficiently deliver rebar to customers in the Mid-Atlantic and Southeast. We're really excited to be growing our presence and creating jobs in our home state of North Carolina. With regard to our modernization and expansion project at Gallatin, the team there has completed commissioning the EAF and LMF. The caster and second down coiler will be commissioned during the coming weeks. Following that, we'll have seven-day outage in early June to commission the roughing mill and hot mill crop shear. By June, all of Gallatin's new capabilities and capacities will be online. We currently anticipate shipping approximately half a million tons of Gallatin's added capacity in 2022. By Q3, Gallatin should be able to produce at a 3 million ton per year rate. Our team continues to receive recognition from our customers for the high-quality products we provide. For the fourth year in a row, Nucor has received GM's Supplier of the Year award. We remain the only EAF steelmaker to receive this award. In addition, Nucor received GM's Overdrive Award for supplying them with our Econiq products. GM is our first customer to receive these products, and it is an example of how we work and listen to our customers to help them achieve their sustainability goals. These awards also demonstrate the benefits of investments we are making to serve our automotive and other customers with demanding applications for lower CO2 intensity steel. To our Nucor team, you should be extremely proud of receiving this recognition for four years running. Econiq is just one example of our focus on sustainability. While our greenhouse gas emissions are just a quarter of the global average for the steel industry, we continue to look for ways to further reduce our emissions. We have supported the development of solar and wind energy projects by signing three power purchase agreements for roughly 600 MW of renewable power generation capacity. Earlier this month, we announced an investment in NuScale, a leading developer of new nuclear power technology called the Small Modular Reactor. This investment in NuScale complements these efforts to help the United States develop new sources of clean power. An effective electric grid requires both base load and intermittent power sources, which is why we believe that both nuclear and renewable energy must be a part of the solution to achieve carbon reductions while maintaining grid reliability. On the trade front, unfairly traded imports remain a concern. The U.S. ITC is conducting five-year sunset reviews this year of key trade orders on flat products, including cold-rolled steel and corrosion-resistant steel. These orders are important to market stability and industry performance, and Nucor will vigorously work to ensure that they remain in place. We view our advocacy for effective trade law enforcement as an essential component of Nucor's efforts to take care of our customers, teammates, and shareholders. Nucor is investing more than $7.5 billion in our steelmaking operations over the 2019 - 2025 period. These investments are expanding the Nucor team by approximately 3,000 jobs and are driven by exciting opportunities to compete in a global steel marketplace where winners are determined by real cost and quality advantages that create sustainable value for consumers and not by government subsidies or other non-economic factors. I'm incredibly proud of the Nucor team's exceptional focus on delivering world-class performance in every area of our business, particularly our record-breaking results in safety and profitability. We are grateful for the trust our customers place in the Nucor team with every order, and we strive to offer exceptional customer value by being leaders in delivering the cleanest and most sustainable steel solutions in the world. Our key forward-looking indicators for 2022 remain favorable, and we expect another strong year in both earnings and cash generation. Now, Steve Laxton will provide more details about our first quarter performance. Steve? Thanks, Leon. I want to start out by thanking all my Nucor teammates for the outstanding work in the first quarter. As they've done over my 19 years with Nucor, the men and women of this team continue to inspire me by what's achieved working together. I'm honored and privileged to be working alongside you in my new role as CFO. As Leon mentioned, first quarter of 2022 earnings of $7.67 per share establishes a new first quarter record, more than doubling the prior record of $3.10 set last year in the first quarter. These results also exceeded our guidance range of $7.20-$7.30 per diluted share. Better than forecast earnings for the month of March were achieved across a broad array of businesses, including our rebar and merchant bar mills, sheet mills, building systems, and raw materials businesses. The value of Nucor's unrivaled product diversity, coupled with our highly variable and adaptive cost structure, was on display yet again in the first quarter. Comparing the first quarter of 2022 to the fourth quarter of 2021, a number of our businesses achieved strong earnings growth and provided offsets to weaker pricing and volumes that impacted our sheet business. Our steel product segment profits of $684 million was the highest quarterly results ever. We fully expect the segment to set a new quarterly earnings record in the second quarter as non-residential construction demand remains strong and margins continue to expand in joist and deck metal buildings and tubular products. It's worth noting here that over the last 10 years, the period ending in 2021, our Steel Products segment EBITDA increased from $66 million in 2012 to just under $1.5 billion last year. Over time, we've intentionally developed a diverse portfolio of market-leading businesses that provide a wider set of end market solutions. These include joist, deck, tubular products, cold finished bars, metal buildings, fasteners, and most recently, insulated metal panels and racking systems. These last two additions made in 2021 make a fantastic complement to Nucor as they sit at the confluence of our core capabilities in growth sectors of the economy. Strong net earnings for the quarter translated into strong cash flows from operations, which amounted to approximately $2.5 billion. We redeployed a portion of this cash via cash expenditures and acquisitions totaling almost $800 million. These strong cash flows also positioned us well to continue to deliver on our commitment to provide attractive cash returns to our shareholders. Capital returns during the period totaled over $1 billion or about 50% of quarterly net income. They consisted of dividends of $137 million and share repurchases of $905 million or approximately 7 million shares. Financial strength remains a critical enabler of Nucor's ability to create incremental value for shareholders. Our company continues to have the strongest credit rating in the North American steel sector. At the close of the first quarter, our cash, short-term investments, and restricted cash holdings totaled $4.3 billion. Nucor's liquidity also includes our undrawn $1.75 billion unsecured revolving credit facility, which matures in November 2026. Total long-term debt, including current portion, was approximately $6.7 billion at the end of the first quarter. This includes $1.1 billion of bonds we issued last month. Half of these are 10-year notes with a coupon rate just above 3.1%, and the other half are 30-year notes with a coupon rate just under 3.9%. These proceeds will be used to redeem our $600 million of 4.18% notes due this September and our $500 million of 4% notes due in August 2023. On March 25, we issued a notice to redeem all $500 million of the 4% notes. Excluding the debt being redeemed this month and the debt maturing in September, gross debt as a percentage of total capital was approximately 26% at the close of the first quarter. Now I'd like to spend a minute or two on capital allocation. Nucor has a clear capital allocation framework that remains unchanged. Our first priority for capital is to create additional value through deployment that leverages our existing capabilities and positions of strength. Our second priority is to maintain and grow a healthy, regular dividend, something we've done for 49 straight years without fail. Lastly, we remain committed to sharing upside returns directly with our shareholders. Specifically, we target a minimum of 40% of our earnings going directly to shareholders via cash dividends and share repurchases. The execution of that first priority is how we create meaningful long-term value for our shareholders. The present successes we are realizing today are a result of our team's consistent focus over our company's long history on disciplined execution of our business model and growth strategy. Today, we are laying the foundation for a future of further value creation. Let me highlight here a summary of some of the key activities. As Leon mentioned, with the completion of Brandenburg later this year, we will have deployed approximately $4.1 billion of capital over the past few years on 10 significant projects that enhance Nucor's competitive position across its product portfolio. We remain confident that these 10 projects will generate annual EBITDA of at least $600 million during normal market conditions. During stronger environments such as 2021 and 2022, we can expect far better results from them. You may recall that during our fourth quarter earnings call, we noted that 5 completed projects accounting for approximately $1 billion of capital spending generated about $675 million in EBITDA during 2021. Looking further ahead, we have roughly another $3.5 billion of incremental capital spending on significant projects planned for the coming years, including our North Carolina rebar micro mill, enhanced capabilities at our Gallatin and Crawfordsville mills, and our West Virginia sheet mill. We expect that once fully ramped up, these facilities will be able to generate around $700 million of incremental EBITDA annually for Nucor, again, during normal market conditions. In addition to our organic growth opportunities, Nucor continues to engage in strategic and targeted M&A activity. As Leon mentioned, we've deployed about $2.1 billion in capital via acquisitions during his tenure as CEO. Collectively, these investments further differentiate Nucor and create a powerful catalyst for future sustainability and shareholder value. We expect to add more than $1.6 billion to Nucor's run rate EBITDA in future years from these already completed and underway investments. We're excited about these opportunities to grow substantial shareholder value in the years ahead. We'll have a short slide deck summarizing them posted on the IR page of nucor.com later today. As Leon mentioned, demand remains strong across our key end-use markets. We expect that the second quarter of 2022 will be the most profitable quarter in Nucor's history, surpassing the previous record set in the fourth quarter of 2021. Second quarter earnings will be driven by the increased profitability in Steel Products segment I mentioned earlier. In addition, the Steel Mills segment earnings are expected to strengthen due primarily to increased profitability of our sheet and plate mills. Nucor's Raw Materials segment is expected to generate increased profits in the second quarter due to relatively higher selling prices for raw materials. Thank you for your interest in our company. Operator, we are now ready to take questions. Thank you. Ladies and gentlemen, if you'd like to ask a question, please signal by pressing star one on your telephone keypad. If you're using a speakerphone, please make sure your mute function is turned off to allow your signal to reach our equipment. Again, please press star one to ask a question. We'll pause for just a moment to give everyone an opportunity to signal for questions. We'll take our first question from Emily Chieng with Goldman Sachs. Please go ahead. Good afternoon, Leon and Steve, thank you for the update today. My first question is just around the volumes that we did see in the first quarter. It looked like there was some declines in plate and maybe modestly lower sheet shipments sequentially. Any sort of end market that's particularly driving that, and then expectations for the rest of the year as we progress? And maybe on that same note, I would note that, you know, steel mill operating rates did or were noted to have fallen to 77%. Is that just a function of a higher denominator? Emily, thank you for the questions. If I forget the second or third ones, please remind me. Let me begin with kind of the backdrop of what we saw in Q1, and I'll begin with sheet and Rex Query, our EVP of sheet, might jump in here for a point or two. As we saw it move from Q4 and really an end of a historic year in all of our product groups and company in 2021 into 2022, we obviously saw kind of about three factors culminating in the end of the year. One was imports coming back in largely from Mexico and Canada. Two, the distributors really got full, and three, the mills all caught up sort of at the same time. As we entered 2022, with pricing going a little bit down and some weakening on the sheet side, we saw some softening there. The large piece of our sheet business is contract-based, and we made some deliberate decisions at that time to focus on our maintenance, took some outages at different facilities to really ensure that we were able and ready to go when that pivot came. Obviously, that pivot came just a few weeks later. Also, I'd share with you, Emily, that we also had a strategic decision to not put tons out there in the spot market when we didn't believe the volumes would support that. We didn't chase tons. As a result, you saw some of our utilizations drop some. Again, as we see the underlying demand in sheet and plate, it continues to be incredibly resilient. As we, you know, Steve just shared with you earlier, we expect Q2 to be an incredibly strong position. Further, as we talk about profitability for Q2, part of the reason why we see Q2 being a record is because of our approach commercially and how we're moving through. You're gonna see those higher-priced tons. Again, that pivot coming in February into early March flow through into Q2 very quickly. Rex, anything you'd add to that on the sheet side, and then Al Behr, maybe a comment or two on plate? Yes. Emily, thanks for the question, and well covered. I can only add a few items. I think Leon did well at setting the stage of what happened late in the year as we progressed. Basically what we saw was those conditions being corrected as we entered early into the first quarter. The second part you asked was about expectations for the remainder of the year, and I'll tie that in with the utilization. To the utilization at 77% you mentioned, we're gonna see a substantial increase of that. We positioned ourselves well with the outages we've had and the maintenance work that occurred to be able to do that and ramp up. For the remainder of the year, I can speak for the next, you know, coming months, bookings have been very strong. Backlog has increased. We see strength. Underlying demand in our core segments that we have in the economy in general are very strong. Thank you, Rex. Al? The story on plate is very similar, Emily. I'll just add a couple more comments in detail. You know, when we look at the market, we look at a couple of levels. One is at the end user level, where the consumption actually takes place. As Leon covered, we saw strong demand there. I would say fabricators remain noteworthy in their strength, the construction business. Heavy equipment remained noteworthy in its strength. There were several areas there where that pull from the consumptive side was strong. As we look at the distributor level, we did see through the quarter some inventory adjustments as they worked their inventories lower, and that created some weakness in the spot market that frankly, we chose not to chase those tons. We kept the long-term focus on profitable tons and used that as an opportunity to take some outage time and do some preventative maintenance and get our operations in a position to where they sit today, at a great position to capitalize on the improving market conditions, the improving pricing, the improving activity. We would expect to run in Q2 at significantly higher utilization, at likely higher margins. Thanks, Al. Thanks for the question. Great. That makes a lot of sense. That cover it, Emily? Yeah. No, that was very clear. I do have a follow-up, and it's just around the raw material mix, and I appreciate the comments that you provided earlier. My question is around the DRI component. I appreciate that you've got a couple of assets there in Trinidad and Louisiana. How should we think about the utilization rates at those two assets, and what's the opportunity to continue to increase production? Yeah. I'll ask Doug Jellison, our EVP over raw materials, to comment. I would just provide maybe a high level first. The flexibility of Nucor's business model has enabled us to pivot. I couldn't be more proud of Doug Jellison or David J. Joseph's team and the entire raw materials team for how they've responded. Because quite frankly, outside of supply chain disruptions that really are inconsequential when we think about the humanitarian crisis that's existing and going on right now in Ukraine, it really pales into comparison. All that being said, the day after the invasion happened, we stopped buying materials immediately from Russia and have taken nothing from them. We pivoted very quickly to other sources around the world. Again, our customers are not gonna miss a beat in delivery and/or quality. Doug, maybe just touch on the DRI side and how you see that moving forward. Yes. Thanks, Leon. Both of our DRI facilities are running well, very, very high world-class reliability rates. We are seeing a little bit of dip as the production went down in the first part of the quarter, and now we're bringing those back up and would expect to run near full capacity the balance of the year. Doug, why don't you touch on the flexibility internally of the demand where we can shift some products? You know, a number of things I'll touch on. Historically, we run about 10% pig iron in our mix, as Leon mentioned in the opening comments. We've adjusted that. Today, we're running about 6% of our mix is pig iron. We also historically in our sheet business run about 25% prime scrap. The DRI, you can see, gives us a very different mix in our profile going into our sheet mills in there. You know, as Leon mentioned, the team has done an outstanding job of really just turning things around literally overnight. That doesn't happen overnight. That happens from years of investment and training into developing of the team and understanding the market and being able to read the signs and react quickly. Right. That's very clear. Thank you. Thanks, Emily. We'll take our next question from Carlos de Alba with Morgan Stanley. Please go ahead. Yeah. Thank you very much. Good afternoon, everyone. Just maybe follow up on the metallics mix. You know, how do you complement the rest? If you're right now running around 7% pig iron, 25% prime scrap, how do you see the component of shredded scrap there? And, you know, what else can you tell us on that front? More broadly on the cost side, how are you dealing with the cost pressures on the labor side, on the energy front, on the natural gas? What can we expect there going forward? Okay. Let me maybe start with the latter and then Doug, maybe, some other color on the. You know, as you talk about the raw material, you know, Carlos, we have an incredibly flexible supply base. It really gives us the ability to switch between prime and low copper shred. We're doing a lot of things internally as well as looking at technology externally that continue to move us up, A, from a sustainability standpoint, in bringing in lower CO2 products into our mix, but also to give ourselves the opportunity to rationalize how do we use that DRI across the Nucor fleet. You know, I think the second part of your question was? Yeah. Carlos, this is Steve. You're asking about cost and inflation pressure, really. When you think about Nucor, inside of our mills, the metallic is roughly 70% of the cost. That is typically correlated highly with steel demand. So it's not going to move in particular, you know, sensitivity to CR, you know, any kind of inflation indexes or things of that nature. When you think about other major cost components, at least for Nucor, not for steel making in general, but because of the efficient, highly variable cost model that we have, it's a little bit different. In our case, energy is a very large portion of that remaining cost, and most of our energy comes from electricity. Most of that is under tariff rate programs, and varies from state to state. There's not a direct and immediate exposure necessarily there. On natural gas, Nucor is extremely well-positioned on that. We typically use a hedge program, and we have physical capabilities to produce gas. Those combine to meet today about 50% of our expected needs for 2022, and we're already hedged with about 40% of the expected use for 2023 and 2024. All those prices are well under the current strip prices. That's because of the active hedge program that we've had in place for a number of years. We're relatively. We're not immune to inflationary pressures. We certainly see that in freight and other areas, but we are pretty well-positioned to manage through those changes. Thanks, Steve. Doug, anything you'd add on the raw materials? Yeah, Carlos, just one more comment on the shred. I don't have a specific number for that because all those numbers change really daily, weekly to give us the optimum cost in it. But what we have worked on, and we've worked on for a number of years, is low copper shred. We've always had a presence in producing low copper shred, but dependent on the economics, there's times where it makes more sense than not. And right now in this market with the spread between the obsolete grades and the prime grades, it makes a lot more sense, and we're putting a lot more, not only short-term, but long-term development into the low copper shreds, which will again increase our flexibility. Understood. Just maybe another question. What are you hearing from the auto guys, your auto customers? We continue to hear the sector is still challenging. They are reducing some production run rates or production rates. When do you see in your conversations, when do you see potentially a pickup on auto rates? You know, look, fair question. What I would tell you is, again, we've been in the business a long time. We have very, very long-term established relationships with our customers. We know them personally, we know them, their needs. Again, the investment strategy is to invest not for capacity, but for capability. To specifically answer your question, you know, Carlos, we're not, as Steve mentioned, immune to recognizing what's happening in the marketplace with inflation, with interest rates. Every one of us is, you know, in our team driving to the gas stations every day to see the impacts across the U.S. I would tell you though, the demand drivers in non-res, in construction, in the digital space, digital warehousing has been sensational. To say it's resilient would be an understatement. Those jobs are being led daily. In many of those cases, our backlogs are at record backlogs, and we're closing the order book because we don't wanna go out as far as some of our customers would ask us to. If there's one area that's, again, been slow to come back, obviously the automotive piece of that in general, but Nucor continues to gain market share because it's not a huge piece of Nucor's overall mix today. It's in that five-6 percentage point range, about 1.5 million-1.6 million tons a year. We expect to double that in the coming years. It is really on the energy side. While you're seeing some signs of life in rig counts moving up somewhat, it's been a much lower recovery out of the pandemic. That's probably the one area that continues to have some opportunity. Overall, and again, the end markets that we serve, the underlying demand remains incredibly robust. All right. I appreciate the color. Thank you. Thank you, Leon, Steve, and Doug. Thanks, Carlos. We'll take our next question from Timna Tanners with Wolfe Research. Please go ahead. Go ahead. Yeah. Hey, good afternoon, guys. Good afternoon. The past couple months have seen unprecedented volatility, and I'm just trying to unpack the way it's impacted Nucor because it's hard for me to contemplate like prices for hot rolls fell dramatically, then doubled and you know, scrap have gone up unprecedented amounts. I'm just trying to think about, you know, if you have a lag in terms of the contract pricing, are you not seeing some of those lower prices for Q1 into your Q2 numbers? Can you remind us about the mix of that? Can you talk to us a little bit how to think about the scraps sequentially into second quarter? Yeah, maybe I'll jump in first and then Rex and on the sheet side, and Doug, if there's anything you want to add on the raw material side. You know, Tim, typically, we're in that 75% contract rate on our sheet group. That's the highest contract rate we have in any of our product groups. You know, the sheet demand has been again and through 2021 was unlike anything I've seen in my 25 years. To your point, as we entered 2022, we did see some softening on pricing, which really drove some of the late Q3, early Q4 import buys that you saw and that we're seeing now really come into the U.S. market where the delta between hot rolled coil in the U.S. and the rest of the world was way too high. Again, that recovered or more equalized in early part of 2022. Again, as we maintain our market perspective and how we wanted to serve this market as Rex and both Al and Plate have shared, we didn't go out and chase the spot tons. We didn't want to, you know, just simply look to bring tons in if our profitability was gonna be impacted. We just made some other decisions as we looked at the quarter, not to give up market share, but also to look at how do we balance that approach moving forward. To answer your question, as we've looked through that, Q2 is gonna increase profitability. Why we stated already we believe that's gonna be a record is largely because of the recovery and how quickly the sheet pricing is gonna move through into the order book of Nucor or the bottom line of Nucor. That's gonna happen again in weeks instead of months. Over the years in conversations with you, there's been at times that lag has been way too long. You're gonna see a very quick recovery. The other thing you look at in Q1 is our breakdown of EBITDA per ton. You know, our EBITDA per ton we maximize that value, and I think that's gonna reflect very strongly against our competition and again flows through to our bottom line for our shareholders. Rex, anything you'd add on the sheet side? Tim, very clear on your premise for your question. What I would tell you, if we had seen a protracted and slower decrease, you could see that extend out further possibly on the recovery. We had such a quick decrease and then rebound that you're gonna see the majority of that move through very quickly, as Leon stated, in a matter of weeks versus months. The other thing I would tell you is that the vast majority of our contracts are geared towards monthly mechanisms versus something that's a longer timeframe. We have small amount that would be quarterly. Again, with the quick decrease and the rebound, that's gonna push through pretty quickly. The other that I would say, as Leon mentioned, as we saw the spot pricing decrease, we didn't go and take the orders for that. Now, as we have that opportunity, the market strengthening, we do have the opportunity to place spot tons at higher pricing than we would have a matter of weeks ago. That's actually gonna help bolster the price and kick it up even quicker. Understand the premise, but we see it being tempered by how we manage through this. Okay. That's helpful on the monthly. Mm-hmm. Tim, this is Doug. One other thing that is a little bit different is how we're leveraging our vertical integration, and we have a much tighter tie from commercial operations and raw materials, and that the reaction time to prices moving against scrap is much, much quicker than we've seen in other swings. You know, building on what Rex has said and stuff, we expect that lag to be shorter with this one. One last point, Tim, is, you know, as we've seen throughout the years and decades, when scrap prices are really high, so are steel prices. Again, that's what you're seeing today, and that's reflecting in the bottom line. Gotcha. If I could, a follow-up, just to understand the answer to Emily's question, and I know you mentioned the commercial strategy, but prices were weak in the first quarter, but demand was strong. From everything I heard from you, if I misunderstood, correct me, but your volumes fell 20% year-over-year on sheet. They were only up, like, 0.4% despite strong construction in bar products. Like, is this? I'm trying to understand, if prices fall, is Nucor withholding tons, or is it more about demand? And how do you ramp up Gallatin in an environment where seasonally demand slips in the second half? Just trying to square that, if you don't mind. Yeah, no, it definitely was demand. Demand definitely dropped off in Q1 as we saw, you know, softening in the sheet market. Yes, it was not a, you know, the same environment we saw in Q3 or 4 of 2021 at all. Again, pricing was dropping. I think there was some, you know, wondering in the market, you know, how long, how protracted, what would that be? It was a great time for Nucor to capitalize on the maintenance outages that we delayed in many of our sheet mills and get caught up. Again, as you know, pointed out earlier, not to chase tons. We didn't do that. Again, a very deliberate mindset on our part to do that. You know, the other piece of that is in the distribution side. You know, that supply chain side of distribution was full. They didn't enter the market nearly as aggressively as we would have typically seen in years gone by in the early part of, you know, a January or February timeframe, trying to, you know, understand what the market was gonna do longer term into the back half of Q1 into Q2. I think, again, that pivot came very quickly and those tons are back and flowing. I think you're gonna see. Well, I know you're gonna see a significant increase in utilization rates across both our sheet and plate groups. Got it. Okay. Thanks again, guys. We'll take our next question from Seth Rosenfeld with BNP Paribas. Please go ahead. Good afternoon. Thanks for taking our questions today. If I could ask a follow-up with regards to outlook for Gallatin, please. I believe in your prepared remarks, you targeted, I think, 500,000 tons of shipments in 2022 versus prior guidance last quarter of 800,000 tons. Can you give a bit of color on what has led to this reduction in guidance, and then the subsequent ramp-up schedule looking through the later quarters? Separately, if you can give us a bit of color also on Brandenburg. Are we on that ramp schedule for late 2022 into 2023? What sorts of volumes are you anticipating there? Thank you. Yeah. Great questions. I'm gonna turn it to Rex Query and Al Behr to give you a more detailed update on Gallatin and Brandenburg. All right. Seth, this is Rex Query with the Sheet Group. Regarding Gallatin, we had an extended outage as we were in December into January. We encountered some unique challenges in the demolition, which frankly delayed the equipment install by a few months. That's the short answer. Our team responded really well, safely, proud of what's been done. As Leon mentioned in the opening remarks, we'll, in a matter of weeks, six, seven weeks, we'll be fully commissioned with all pieces of the equipment there and operating. Subject to market conditions, we would expect to be running really at nameplate capacity during the third quarter, and that's gonna be an additional 500,000 tons. The majority of that during the second half of the year. Seth, this is Al. On Brandenburg, you know, our team there in Brandenburg continues to do an outstanding job of executing on that project. They've come through COVID, they've come through supply chain issues, and they remain on track for a startup at late Q4 of 2022. In terms of meaningful production times, I'd expect those in Q1 of 2023. You know, I don't have a number to share with you other than to say, well, that's largely market dependent. Typically, in the first year of startup, we aim for a run rate by the end of the year of three-quarters of capacity. But how that looks through the year is determined on where the market sits at that point and how we can respond to it. Thanks, Al. Thank you. If I have a separate question, please, with regard to steel products. In your prepared remarks, you touched on strength in the construction market. We heard from one of your peers earlier today, discussing the really excellent margins they're seeing going into Q2 and then beyond that later quarters of this year. Can you give us a quick update on the strength of that backlog, both in volume and in pricing terms, and how you'd expect margins to develop, not just for Q2, but if you can, later quarters of the year, please? Yeah, certainly, Seth. I'll ask Chad Utermark to comment on that. Just as a backdrop, the performance of our products groups has been spectacular. Again, I couldn't be more proud of how they've responded again and what they've done and how they've achieved. We expect continued great things and improving things as they head throughout the year. But Chad, you wanna provide a little more detail on the products? Yeah. Thanks, Leon. Seth, this is Chad. As mentioned, we continue to see very solid seasonally adjusted quoting activity in Q1 and as we head into Q2. Our overall backlogs are very strong, and I would note with improving margins. Our customers are overwhelmingly bullish on 2022 demand. I would remind you that, you know, a Nucor portfolio of downstream businesses gives us a really good visibility into that space with our rebar fab, steel piling, prefabricated metal buildings, racking now in the portfolio, steel tubing. We've got insulated metal panels, joist and deck, and steel conduit. Yeah, overall, we're very excited about what the demand picture looks like as we head into 2022. We've mentioned this before, but I'm still amazed at the strength of the digitized economy, the green economy. They're just strong. They're creating significant demand for distribution centers, warehouses, server storage facilities, and EV-related facilities as well. We're also seeing a manufacturing growth, plants being built, manufacturing plants across the country. Yeah, we're excited. Yeah. Hey, Seth, this is Steve. I just wanna add on to Chad's comments here. You know, our product segment or our downstream steel products group is a meaningful part of our portfolio. I think that's one of the real differentiators for Nucor versus many people in our space. We offer a wide array of end market solutions. Just in the last quarter, that group contributed just over $760 million in EBITDA to give you a sense of scale on that. We project that the second quarter will be even stronger. That's a real lever and a positive attribute of our portfolio that some folks don't have. Okay. Thank you very much. Thank you, Seth. We'll take our last caller from Curt Woodworth with Credit Suisse. Please go ahead. Yeah. Hey, good afternoon. Just wanted to follow up. Good afternoon, Curt. Just wanted to follow up a little bit on the steel product segment as well. I know you've done a fair amount of acquisitions in that business. I guess when you look at the backlog and kind of the long-term, you know, earnings power of the business, do you feel like the 1Q run rate, you know, is fair? Then in terms of 2Q, just given your guiding to earnings being up, even though you've got some spread compression, you know, potentially in the long product side of the portfolio, it seems to imply that EBITDA would be up pretty significantly in the steel products business. I was wondering if you could give any more granularity on that. Is my first question. Yeah. Thank you, Curt. We're not gonna guide to a specific target EBITDA for that group at this point in time. You know, we provide quantitative guidance much later in the quarter. We will say that the end market demand is strong across the board and backlogs are strong. I think you've heard that already from us today. These businesses are ones that are very responsive in terms of their ability to generate upside cash flow benefits to the company when markets are strong. I think that's one of the things that the highly variable nature of the cost of these products and these groups are differentiated in many ways. I would just add that typically, due to seasonality, the run rates will pick up as we move into second and third quarter. Construction projects are in full swing, and again, the backlog is strong. Again, we have many different businesses, so I'm careful when I say in general. Overall, I would expect to see some of the run rates in most of our businesses pick up some. Curt, you mentioned longs. You know, I just provided a very quick comment on longs. If you think about the 10-year history, like our beam mill, for example, probably average 70% utilization over the last decade. As we entered in 2021, that increased to over 90%. That beam mill and that market leadership position we have in structurals creates incredible earning power. Again, that demand and those drivers remain very strong both in beams and rebar and most of our longs businesses that are generating incredible returns for our company. Okay. With respect to M&A, would you expect to continue to deploy more capital into the steel products segment? Are you evaluating any potential increased investments to, say, further DRI, or other sorts of ways to get more captive pig iron prime scrap? Thank you. Look, as we continue to again set the first quarter record as we set record earnings in 2021 at over $6 billion of earnings, we're continuing looking for ways to deploy that capital. As Steve laid out earlier in his comments about our capital allocation framework and philosophy, it is first to reinvest in growth, and we're gonna do that in a multitude of ways. Our mission statement is eight words. It's grow the core, expand beyond, and live our culture. The core being those core assets. Yes, you're gonna see us continue to do things like the micro mill, like the West Virginia plant, like the expansion at Crawfordsville. Then on the expand beyond piece, like the cornerstone in acquisition of the insulated metal panels or Hannibal Industries and bringing on the racking. Those things will continue to be great opportunities for Nucor to continue to diversify and grow our portfolio. There's a whole bunch of irons in the fire, Curt, that I can't talk about, that we're gonna continue to look and bring, and maximize shareholder value that we're really excited about. Okay, great. Thanks very much. Thank you. Ladies and gentlemen, this concludes today's question and answer session. At this time, I turn the conference back to Leon Topalian for any additional or closing remarks. Thank you. As we conclude the call today, I just wanna thank our team for your continued focus in delivering on our most important value, the safety, health, and well-being of all 30,000 men and women who make up the Nucor family. To our customers, thank you. Thank you for the trust that you place in the Nucor team with every order. Our investment strategy is to build the capabilities to serve you today and well into the future. Finally, to our shareholders, thank you for the trust that you place in us with your valuable shareholder capital. We look to steward that well, maximizing your returns. Thank you for your interest in Nucor, and have a great day. Ladies and gentlemen, this concludes today's conference. We appreciate your participation. You may now disconnect.