Good day, everyone, and welcome to the Nucor Corporation Second Quarter 2010 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 this conference call 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 assurance that future events will not affect their accuracy. More information about the risks and uncertainties relating to these forward-looking statements maybe 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 obligations to update them either as result of new information, future events or otherwise. For opening remarks and introductions, I would like to turn the call over to Mr. Dan DiMicco, Chairman, President and Chief Executive Officer of Nucor Corporation. Please go ahead, sir.

Thank you, Christie. Good afternoon and thank you all for joining us for Nucor’s second quarter conference call. As always, we appreciate your interest in Nucor. With me for today’s call are the other members of Nucor’s senior management team, Chief Financial Officer, Jim Frias; Chief Operating Officer of our Steel making Operations, John Ferriola; and Executive Vice Presidents, Keith Grass; Ladd Hall; Ham Lott; Mike Parrish and Joe Stratman. Also joining us is Jim Darsey who will be succeeding Mike Parrish as Executive Vice President of Bar Products when Mike retires at the end of August. After reviewing our second quarter results and our work growing Nucor’s long-term profitability, we will take your questions. First, and most importantly, I want to thank everyone in our team at Nucor and at our Harris Steel and David J. Joseph operations for working safely and working together. While economic conditions remain extremely challenging, your talents and can-do attitude are getting the job done, so that Nucor continues our long history of emerging from downturn stronger than we entered them. Thank you again and keep up the good work and stay safe. Our second quarter earnings of $0.29 per share increased 190% over the first quarter earnings of $0.10 per share. They also improved significantly from the year ago quarter’s loss of $0.43 per share or positive swing of $0.72 per share year-over-year. Improvement in operating results, excluding LIFO was even stronger. Second quarter of 2010 results included a LIFO charge of $67 million that compares to a first quarter LIFO charge of $24 million and second quarter of 2009 LIFO credit of $125 million. It is also worth noting that our second quarter guidance of a range between $0.20 to $0.25 per share, assumed a LIFO charge of only $47 million versus the $67 million actually incurred. The profit improvement was driven primarily by expanding metal margins of our steel mills. Operating rates at the steel mills in the second quarter were essentially unchanged from the first quarter overall. Higher utilization rates at the beam and plate mills are offset by lower range at the sheet mills and somewhat at the bar mills. As expected, our downstream businesses continue to be impacted by severely depressed non-residential construction markets. While markets appear to have bottomed, the recovery appears to be slow. The Nucor team is doing a lot more above and beyond the hard work of managing through today’s harsh economic environment. Strength of our business model and our culture enables us to use downturns as opportunities, opportunities to grow Nucor’s long-term earnings power. We’re doing that by investing in our people, and investing in our operations, and investing in our growth. This focus on the long-term is how our company builds real and sustainable value for our shareholders, teammates and the people who buy and use our products. Our investments have been built from the growth platforms, we have established in steel making, upstream raw materials, downstream value-added products and internationally. The list of the initiatives currently underway are many that tells the story of profitable growth ahead for Nucor. In steel making, the Memphis SBQ mill, the Decatur Alabama galvanize facility, the Castrip plant in Arkansas, the heat treat facility in North Carolina at our plate mill, and the Arizona wire rod and coil rebar mill. In raw materials, a team at David J. Joseph Company to expand in this scrap processing platform in the strategically important markets through both acquisition and greenfield opportunities. And our proposed pig iron project received its air permit in May from the State of Louisiana. In downstream steel products, our Harris Steel team continues to make bolt-on acquisitions to fill out their rebar fabrication platform. And our joist, deck and metal building businesses are growing their market shares as competitors retrench, and in some cases abandon the marketplace. International, Duferdofin-Nucor long products joint venture in Italy has begun production this year as new merchant bar and rebar mill in Sicily. In April, we consummated our NuMit joint venture with Mitsui. It is already off to a great start exceeding the original expectations. NuMit’s investment in steel technology has been very timely in terms of increasing our participation on the automotive sector of the flat-rolled market. And I, along with John, Joe and Ladd just returned from a visit last week to Japan with Mitsui’s senior management team and also visited Mr. Inoue, at our partners at Yamato Kogyo. Our meetings at Mitsui reinforced our already very high confidence that NuMit will be a long and profitable partnership, and as always, it’s good to see our longtime partner, Mr. Inoue. The opportunities have the potential at Mitsui to expand the partnerships reached into raw materials, steel making and downstream businesses, both domestically and internationally. We’re excited to be teamed with a company like Mitsui that shares our vision for long-term profitable growth. The breadths of these initiatives highlight some of key fundamental strengths of Nucor, price diversification and multiple growth platforms. And while they are diverse, they share a vital common denominator. They all represent attractive opportunities for profitable growth, growth that positions Nucor to emerge from the current economic downturn stronger than we entered into it. Looking at current economic conditions, the long, slow recovery in demand that we expected is unfortunately the reality our country faces today. Now there are also legitimate concerns as to the possibility of a double-dip recession or at minimum significant slowing of growth. Here, we are talking about the economy overall. Numbers reported earlier this month by the U.S. Government Bureau of Labor Statistics tells a story that is very troubling. When the American Recovery and Reinvestment Act of 2009 was signed into law in February of last year to the present time, the number of unemployed and underemployed Americans has increased by 2.4 million to almost 26 million men and women, and that actually understates the magnitude of the ongoing job crisis. Over the same period, the size of the civilian labor force has shrunk by almost 700,000 people. Many of the unemployed have given up hope of finding a job and left their ranks of the civilian labor force. The obvious question is where is the return on the tax payer’s investment of nearly $800 billion, and in total over the last two administrations over $1.1 trillion, suppose its stimulus. That is the bad news. And it is a very, very serious situation, threatening the speed of the economic growth and our nation’s future prosperity. But there is good news. The way forward to the stronger and more sustainable American economy is clear. It is not complicated. You identify the real problems first then you come up with real solutions, and not more of the short-term sugar high approaches that have failed so miserably thus far. The real problems of the structural imbalances that are dragging your economy deeper and deeper into a hole of all little or no growth, an economy fueled by excessive leverage and the company trade and budget deficits is simply a path to ruin. And the real solutions that eliminate the unsustainable balances and also create what the economy requires for sustainable growth, that being jobs, jobs and more jobs and growth in the private sector. Here’s how we can do and must do. First, we must achieve near energy independence by increasing our domestic supplies of carbon, nuclear and renewable energy. Imported oil accounts for about half of our trade deficit. Second, we must enforce rules-based free trade. Many other jobs have been destroyed as a result of our government’s failure almost several decades to stop the mercantilistic predatory trading practices of our principal trading competitors. Third, we must rebuild our outdated and unsafe infrastructure. The American Society of Civil Engineers estimates this requires investment of more than $2 trillion over the next five years. And the key word here is investment, and investment that will pay back for decades and generations to come. Each component of this three point plan, will create jobs, increase tax revenues and approve our trading balance, and as long past times stop talking, it’s now time to take the right actions, and I can’t emphasize more strongly that there are the right actions and get the job done. In America that makes and builds things will create the jobs that will rebuild our economy, our middle class, and our country and its economy. Future course of the economy is undoubtedly beyond our control, but not beyond our influence. One thing is for certain our new core team will meet any and all challenges head-on and turn them into opportunities; that is exactly what our team has been doing for more than four decades. We do this by being realistic, by being futuristic, by being innovative and working together as a team. I will now ask our CFO, Jim Frias to update you on our financial position, and our qualitative guidance for the third quarter. Jim?

Thanks, Dan and good afternoon. Nucor’s strong financial position allows us to manage our business with the long-term focus. And that long-term focus is critical for building a sustainable business model that takes care of our shareholders, employees and our customers. Here are some highlights of our financial strength at the close of the second quarter. Cash and short-term investments totaled $1.1 billion. I will note that this is down by $858 million from the first quarter levels, and that is primarily for two reasons. In April, we invested $315 million in our NuMit joint venture. Additionally, higher scrap and steel selling prices increased our cash invested in working capital by approximately $490 million, reflecting the improved business conditions we experienced in the second quarter. Further to Nucor’s strong liquidity our $1.3 billion unsecured revolving credit facility is undrawn and does not mature until November of 2012. We have no commercial paper outstanding. Debt totaled $3.1 billion for debt to capital ratio of 29%. Our net next debt maturities are in 2012 and they total $650 million. 70% of our debt matures in 2017 and beyond. Nucor does not have any meaningful pension or other post-retirement employee benefit liabilities. Nucor also holds the highest credit rating of any North American steelmaker, with a single A rating from both Moody’s and Standard & Poor’s. As Dan observed, our financial strength allows Nucor to grow stronger during downturns. We do that by investing in our people, and investing in our operations to grow our long-term earnings power. Pre-operating and start-up costs for new facilities were $43 million for the second quarter of 2010 and $94 million for the first half of this year. These expenses were primarily incurred at the Memphis SBQ mill; the Decatur galvanizing line and the Arkansas Castrip plant. Capital spending for the first half of 2010 was $163 million with $109 million of that total spent in the second quarter alone. For the full year, we project approximately $375 million of capital expenditures. Some of the major projects this year are the North Carolina plate mills heat treat facility and expansion at our DRI plant located in Trinidad. In the short term, as we enter into third quarter, there was a slowdown being experienced across all product lines. It appears that the U.S. and global economies have recently entered a new period of uncertainty. The most challenging markets remain construction, both residential and non-residential. We will again follow our practice of providing quantitative guidance in the final month of the quarter. In the long-term, we are very optimistic about Nucor’s prospects. We believe in American people and their confidence that they will drive our elected officials of both political parties to deal with our nation’s unsustainable trade and budget deficits. Those policy changes will unleash and revitalize the American economy in the way that creates real jobs, increases the demand for steel products and brings a multitude of sustainable benefits to all Americans. And what is good for America is good for Nucor. In summary, Nucor is in a position of strength to build on our company’s long tradition of being effective stewards of our shareholders valuable capital. We thank you for your interest in Nucor. Dan?

Thanks, Jim. I will now ask John Ferriola to report on our steel making and raw material businesses. John?

Thanks, Dan, good afternoon. Let me begin by thanking all key members at our Nucor Steel Mill and our David J. Joseph and Nu-Iron raw material operations for your outstanding commitment to working safely and taking care of our customers. Your dedication and talents particularly like tough markets like these are Nucor’s biggest competitive advantage. And I will again emphasize the importance of everyone staying focused on safety. We want all of our teammates, Nucor’s most valuable assets to be around to enjoy benefits from that hard work. I want to particularly thank the rolling mill operating and maintenance teams at our Kankakee, Illinois bar mill for working three years without a reportable accident and our D. J. Joseph scrap processing team at our Newport, Kentucky facility for working two years accident free. Thank you. Please, keep it going. Second quarter total steel mill shipments of 4.6 million tons increased 53% over 2009 second quarter and decreased 2% from first quarter of 2010. While overall shipments decreased modestly in this year’s second quarter compared to the first quarter, our plate and beam mills both enjoyed volume gains on a length quarter basis. We believe this performance proves Nucor’s product diversification as one of our company’s greatest strengths. In fact, our beam mills ran at a capacity utilization rate, exceeding 60% in this year’s second quarter. That is clearly an outstanding accomplishments in today’s severely depressed non-residential construction market. Our Nucor-Yamato model and Berkeley beam teams continue to reap the rewards that come from the excellence in customer service and continual focus on new product development. In the second quarter, Nucor-Yamato began producing a new H-piling section known as HP-16. This is the largest H-piling section offered in the North American market, and it provides yet another alternative solution to meet the foundation piling needs of our customers. The new product ran at 240 tons per hour and exceeded a 92% yield in its very first full production campaign, which makes it comparable to our best running sections on that mill. The HP16 is yet another outstanding achievement in new product development of Nucor-Yamato, lead by our roll shop supervisor, Ed Cable, our entire roll shop, roll mill and finishing teammates. By the way, the initial production of this material will be going to jobsites in and around New Orleans for the ongoing rebuild and reinforcing of the Mississippi River Levee System. I want to congratulate and thank all men and women of Nucor’s B Mill Group for a job well done. Thank you. Keep it going. As Dan mentioned, our second quarter earnings performance was highlighted by improved metal margins at our steel mills. The spread between our mill’s selling prices and our iron unit’s usage costs increased by $36 per ton in the second quarter to $361 per ton. While the costs of scrap and scrap substitutes increased by $55 per ton, margins actually improved significantly as a result of a $91 per ton increase in the average mill’s selling prices. This is evidenced of the excellent work done by our Steel Mill and David J. Joseph teams in managing their businesses due to the sharp spike in metallic pricing experienced earlier this year. And it is another data point in a long-term record of Nucor’s steel making operations experiencing higher profit in periods of rising scrap and other raw material costs. I believe this is an important historical relationship that investors should understand in studying our company and our industry. Second quarter and first half results also benefited from the performance of our raw material businesses. Our David J. Joseph team capitalized on the strength of ferrous and nonferrous scarp markets experience through the month of May and in those hydro-metallic markets. Increased production of DRI by our new iron team enhanced the profitability of our steel mill assets in this year’s first half. Implementation of our raw material strategy took a big step forward was [achieved] in May of the environmental permit in Louisiana for our potential big iron project. I will reiterate that we have not made a decision on big iron yet. The biggest hurdle to moving forward in the United States, this project remains the risk of a cap and trade system that places an unfair burden on domestic steel makers, while it hits the foreign competitors not facing similar restrictions and costs. However, I will emphasize that we do remain committed to increasing our control over low cost supplies of high quality scrap substitutes. Our Nu-Iron team’s continued strong performance is evidence of Nucor’s ability to successfully operate a high-quality scrap substitute production facility. In the short three and a half years, our team has operated the Trinidad Direct Reduced Iron plants they have gone from being neophytes to being experts in producing DRI. Today, Nu-Iron operates at world class levels, 115 metric tons per hour with a metallization rate of 96% and over 3% bar. This high quality has allowed us to dramatically increase our percentage of DRI in our iron unit’s mix. And it gives us more options on the levels of prime scraps and pig iron used in the mix, allowing us to optimize the cost of iron units used in our steel making process. I would also like to update you on the continued success our steel mills are achieving at the export market. Nucor is uniquely positioned among U.S. steel producers to capitalize on stronger economic recoveries being experienced in other regions of the world. Over 60% of our steel production capacity is located on or has access to Deepwater. First half 2010 exports were 1 million tons, running at about 500,000 tons for both quarters. That line represents almost 11% of our total steel mill shipments, and it is a 53% increase over the year-ago level. Looking at current market conditions, demand is slowing in most markets. At this point it is difficult to determine how much of this trend is just seasonal and how much is the result of the challenges facing the overall economy. Additionally, there has been a slight increase in service center inventories. For June, month of supply for all products on a seasonally adjusted basis was 2.5 months. That is up from 2.4 months in May, but below of the 2.6 month level in June of last year. Our long-held view has been that the economic recovery will be uneven with continued exposure to downside risks. Whatever direction in the economy and the steel markets take in coming months, we will outperform in taking care of our customers. And that includes our employees, our shareholders, and the people who buy and use our products. We will do that by capitalizing on our substantial competitive strengths which include our highly flexible production and customer service capability, our diversified product portfolio, and most importantly Nucor’s team’s can-do attitude and high energy level. Here is an excellent recent example of exactly what I am talking about the Nucor team’s unrivalled commitment taking care of our customers. In mid June, flooding on the Elkhorn River caused the collapse of the railroad bridge that provided service to our bar mill in Norfolk, Nebraska. It is the only route for the railroad into our mill. Prior to the collapse, about 50% of Nucor Steel-Nebraska’s customer shipments are typically by rail. So how did our Nebraska team respond? They swung into action immediately to ensure that our customers did not experience any adverse impact on their business as a result of the mill no longer having direct rail service. Within days, our Nebraska team worked with the railroad in one of our large customers (Inaudible) Steel to set up transloading sites south of the river. They opened up an additional gate at the mill to receive trucks. They expanded shipping hours at the mill. They worked with the county to close the road in front of our facility to through traffic in order to allow the safe and efficient movement of trucks in and out of the mill. And our David J. Joseph teammates working with one of our great suppliers, AltaSteel set up a transload site at their scrap yard in Council Bluffs, Iowa to enable the offloading of scraps from railcars on to trucks, ensuring a continuous flow of scrap into our mill. The bottom line, June shipments at our Nebraska bar mill exceeded our team’s original projection at 5%. That is the Nucor can-do attitude in action, and it is getting the job done. Way to go Nucor Steel Nebraska team. Thank you to all involved in taking care of our customers and for doing it safely. I want to again thank all members of our Nucor Steel Mill, David J. Joseph and Nu-Iron teams for your hard and extremely productive work and as always please stay focused on priority number one, working safely. Before I turn this back over to you, I want to correct one statistic, our production capacity at Nu-Iron is 215 metric tons per hour. I misspoke and said 115 metric tons per hour. Dan DiMicco Thank you, John. At this point, I’d like to ask Ham Lott, to update us on Nucor’s fabricated construction products businesses. Ham?

Thanks, Dan. Demand for fabricated construction products remained extremely weak in the second quarter of 2010. However, our second quarter shipments for each of our major products did increase from the year-ago quarter. Comparing second quarter 2010 sales tons with the year-ago period, metal buildings increased 88%, steel deck and joists both increased 11%, and fabricated rebar increased 4%. As evidenced by their volume gain, our pre-engineered metal building teams have done an excellent job of gaining market share. They have also been able to secure price increases. This is the strongest of our fabricated construction products markets. After increase in market share last year, and increasing prices in the first quarter of this year, our Vulcraft/Verco Group is now encountering stronger competition. The steel joists and deck markets are still quite weak. Rebar is the most competitive of our fabricated construction product markets. We have been unable to significantly increase our prices. Nucor has over four decades of experience in managing through down cycles in fabricated construction product markets. We always view cyclical downturns as opportunities to grow stronger and build long-term earnings power. We achieved that by focusing all of our energy on taking care of our customers with product quality and service they expect. I would like to add to John’s story about Nebraska. Vulcraft is located near that river. The joist plant, the deck plant, and the office were flooded, as was the cold finish plant. Within several days, all of the plants were operational, and a majority of the office personnel were relocated to nearby facilities. It was a tremendous feat that was only doable by extremely dedicated Nucor employees and managers. I want to say thank you and keep up the good work and continue your strong focus and performance on safety to all of our team members at Harris Steel, Nucon Steel, Nucor Buildings Group, Verco and Vulcraft. Dan?

Thank you, Ham. Mike Parrish, our Executive Vice President Leading Nucor’s Bar Products Group announced his plans to retire at the end of August. Throughout his 35-year career with our company, Mike has been an exceptional leader. He has made outstanding contributions to both Nucor’s strong record of profitable growth and Nucor’s unique culture. Under Mike’s leadership, our bar products group more than doubled in size to a current finished steel shipment capacity exceeding 9 million tons annually. With his team’s very successful work in optimizing existing operations and completing strategic acquisitions, the growth and earnings power of the bar products group has been even greater. While he may be retiring, Mike will forever be a member of the Nucor family. All of us are thankful for his leadership, and everyone in our team joins me in wishing Mike and his lovely wife Chris all the best as they enjoy the well deserved fruits of their career at Nucor. Mike’s retirement and promotion of Jim Darsey to Executive Vice President of Bar Mill Products result from a thoughtful and honorary succession planning that has been a tough strategic initiative of our company over the last 10 years. This work positions our company for continued profitable growth. Before continuing, I’d like to ask Mike to add a few thoughts.

Thanks, Dan, appreciate the opportunity. I just want to say thanks to all our teammates for everything they have done throughout my 35-year career. We were joking earlier that, when I started many of you weren’t even born yet and that kind of hurts. But if you look at it you’re only as good as the people you work with, and in that 35 years I just had so many great teammates and colleagues to work with and I just want everybody to know how much I appreciate that. I know Dan always says this, I don’t want to steal any thunder but when you look at the team we have, the future of Nucor, it definitely you can see that the best years for Nucor are definitely ahead of us. I just want to say thanks everybody for everything and good luck.

Thank you, Mike. Jim Darsey, who will be stepping into Mike’s formidable shoes as a proven Nucor leader. He has a strong record of success in managing both steel mill and downstream products divisions over his 31-year Nucor career. Jim and his team are well prepared to continue building long-term profitable growth at Nucor’s bar products businesses. As stated earlier, the Nucor team has been meeting all challenges head-on successfully for more than four decades. We are a company born out of near bankruptcy in the ‘60s, and between 1980 and 2008, we grew our revenue from $500 million to $23 billion. This was all accomplished while the overall domestic steel industry was shrinking by 30%. Our growth opportunities are greater than ever through a broad platform in steel making, raw materials, downstream fabricated products, and steel processing, both here and globally. We paid a strong dividend and have a strong balance sheet and our best is yet to come. We would now be happy to take your questions.

(Operator Instructions) Your first question from Kuni Chen with Bank of America. Your line is open.

I guess just first off, if you look at the industry operating rates, first quarter versus second quarter, again for the whole industry, you went from 68% to roughly 73%. So can you give us a little bit more color on why we saw your operating rate actually decline relative to that? Can you comment on market share or this is just really more a function of competitive dynamics or maybe more operational issues?

I’m going to take a hard look here, Mr. Greg Lucas, to make sure I say this properly. So, if you take the look at the average operating utilization rates for Nucor over the first six months, it was slightly above that of the industry as a whole. In the second quarter, we did see a slight fall off versus first quarter and I think that had a lot to do with some of the dynamics taking place in the flat-rolled business. John do you have any further thoughts on that?

Well as the flat-rolled did weaken at the end of the quarter and that had an impact on the utilization rates. If you look at the comparison to Q2 versus Q1 on utilization we’re looking at a very small decline, just about 1.5%.

I think Kuni what we would like you to focus on is the fact that selling prices were higher than most people anticipated. Profitability was three times what it was in the first quarter, so there may have been a little method to that madness.

Okay, now that makes sense. I guess, just one quick follow-on then I’ll turn it over. Can you guys just comment on LIFO in the second half for looking at somewhat lower production and lower scrap prices going forward from here, should we also be expecting a much more modest LIFO impact in the back half?

Well, first off, what we see in terms of actual production and order actually and shipments in the second half is yet to be determined. We were very careful to indicate our concern over where things are at right now, but that doesn’t necessarily translate itself into lower shipments and lower production into second half versus the first half. But having said that, Jim, would you like to follow-up on the LIFO?

Yes, Kuni each quarter when we book LIFO, we’re doing it based on where we’re expecting to finish the year at. So, it includes estimates based on year-end. So, our year-to-date LIFO expense is $91 million. So, you could expect that based on what we see today, we think we’re going to have another $91 million in the second half of the year, you could split that evenly across the quarters. The real numbers are probably different than that, but that’s what we see today.

At what point do you revisit the LIFO assumption?

Every quarter as we look at our inventory positions and the values in what we see in the scrap market.

A final true-up is at the end of the year.

Our next question comes from the line of Luke Folta of Longbow Research.

A quick question just so far on what we’re seeing in July. Can you give us a feel for what utilization rates are at some of the mills? And also maybe the order book over last week or so, I mean have you been seeing any pickup as it relates to August orders?

We don’t give week-to-week utilization rate information. We do it on a quarterly basis. There is no doubt that on the flat-rolled side, as John mentioned, utilization rates have dropped in July, but that remains to be seen whatever shake out for the entire quarter. John?

The only thing I would add to that is when you look quarter-to-quarter if you’re looking at individual products we did see some decline on flat-rolled. Remember, we saw a significant increase on two of our product lines in beam and in plate.

Would you expect that increase to sort of continue through the remainder of the year as far as on the long product side?

Well, certainly on the long product side we’ve hit bottom in our estimation and while the markets were non-residential and residential still appear to bouncing along the bottoms. We are looking for some increased opportunities, if truly we do see some stimulus impact in the second half of the year which a lot of people have commented on both in Washington and in the industry. But a lot of us are from Missouri and the way we look at things and so we’re still waiting for the markets to show us at.

And just lastly your NuMit joint venture some of the reporting format, are those tons getting booked into the flat-rolled segment or in the other segment? As far as how you report that.

That’s not a consolidated subsidiary, so we don’t include their tons.

Our next question comes from Michael Gambardella of JPMorgan. Your line is open.

I have a question on the blast furnace project. What is the current estimate of the capital cost of that project?

$2 billion not counting any incentives from the state.

Have you looked at the potential alternative instead of building that of buying Sparrows Point, which has one of the largest furnace on a deepwater port and also would take out 3.5 tons of the capacity in the industry as well?

Certainly, you’re making a very good point, Michael, about the Sparrows Point facility in terms of it being on the deepwater port. We pointed out a couple of the positives there, a host of negatives as well, and while we have looked at that; I will tell you, over the years, we have looked at that because as you know, it has presented itself on numerous occasions. We don’t believe that would be the best way to go if we are to move forward as we plan on with an iron project in Louisiana.

I think the whole plant was acquired in a much better market at somewhere around 800, wasn’t it?

$800 million, is that what you’re saying?

Yes.

I don’t really recall. I will take your word at that. But as I said, there are a host of issues that would make us be very concerned and vary of actually being involved in an acquisition of that asset. John?

I’d just to add that. (Inaudible) Mike, it really wouldn’t change the market dynamic because we would continue to operate the mill on flats that they would bring. So you really wouldn’t be changing the market dynamics. We’re getting much of the gains from that perspective.

I was assuming you just run the blast furnace and shut down everything else.

Well, you’re making an assumption that the current owners would sell the entire thing as opposed to just the blast furnace.

No, I’d say, they sell the whole thing and you just run the blast furnace operations.

We’re not aware of that being the case, so I don’t want to get in and speculate.

Our next question comes from the line of Chris Olin with Cleveland Research. Your line is open.

Maybe I missed it, but I was hoping you could provide us some thoughts on where we see scrap going over the next couple of months?

I don’t think you missed it. We don’t think we said anything. But I’m looking at Mr. Keith Grass as I speak and Keith is looking at me and I’ll have him do the speaking on that.

Well, I guess certainly we’re seeing the downward trend during the course of Q2, and in the general sense, we probably feel those things would stabilize or to a degree bottomed. Couple of factors that have led into that and certainly throughout our scrap processing facilities and I would imagine this is indicative around the country. Scrap flows into the facilities have dropped off by about 25% to 30%. So we’re seeing a little bit less flow into the yards. During the course of the past few weeks, we’re seeing an increase in the inquiries coming from the export market. They have been absent for probably 30, 45 days in a more aggressive way. So they have reentered to a degree and from getting in the quarter to now, we’re sort of seeing a reversal in the dollar, where it has started to move a little bit lower, and as the dollar moves lower, we’ve always seen scrap prices move sort of inverse proportion to that. So we start to see that strengthen. I don’t see it run away bull market. It just seems to be sort of stabilization in and around this range and possible strengthening has been booked out for the next 60, 90 days.

Just one quick follow-up for Ham. One of the big concerns out there is a lot of these bonds are failing and while stimulus is getting better, maybe we start to lose the core public demand. I was just wondering if Vulcraft has seen anything different in terms of some of these steady public projects that have been on the books for a while, I mean any thoughts on if that’s getting weaker or you’re seeing anything different?

Vulcraft is not very involved in public projects. That’s really not our bread and butter. It hasn’t been the industry’s bread and butter. So that’s not an area to look at for us.

Our next question comes from Wayne Atwell from Casimir Capital. Your line is open.

I would like to congratulate you for successfully dealing with this really tough economic environment. Can you pass on some thoughts in terms of how much you might ship into the export market? How much of your share you might send? Because there’s probably some limitation, you wouldn’t want disappoint domestic customers. On the other hand, if you can’t sell it here, you might want to sell it over there. So what kind of is the extent of your export exposure do you think?

First off, we would not be taking on commitment to export, that would jeopardize our domestic customers. End of story. In today’s environment, it would have to be very unusual circumstances that put us in that situation with the utilizations running at the levels they are running at. As far as the rest of your question, John, do you have any thoughts on that?

11% is what we have exported, that’s the rate thus far this year. Certainly, our plans would be to work to continue to do that as the opportunities present. There maybe a little bit less opportunity to export today than there has been because overall the dollar has strengthened even though there’s some weakness as Keith mentioned showing up lately. But that’s usually more influenced by the actual demand and the participation of other countries in the export market and what pricing levels they do that. But starting at the beginning of this year, we were somewhat tentative about how much we’d be able to do export and we’ve surprised ourselves to be able to export at those kind of levels, so hopefully we’ll be able to continue that. John?

I would add to that, Dan, on product acceptance. Our product has gained great acceptance, particularly in the South American markets. One of the products that we’ve been very successful in the South American market in particular is our Castrip product, so that’s offsetting the impact of the dollar. We have the potential to maintain the same level of exports because of the products, particularly the value-added products that we brought into the South American market and Castrip product we’ve brought into the market.

A quick follow-up, I assume a lot of this went to Europe with some of it going to Latin America?

The vast majority of it goes. And it makes sense, if you look at the location of our mills, anywhere south, South America, Costa Rica, Central America, anywhere in Latin America, we do well in Mexico and also in Canada, but not much really into the European market at all in the first half of this year.

I would add one further thing. One of the things that’s supporting our continued success export wise is our customers that have operations, particularly in South America, Brazil, have been very active in soliciting our support in those markets, and Mexico as well, and we’ve been able to accomplish that.

Dan, one more point if I may, and that’s relative to Mexico. Our partnership with the Steel Tech acquisition has opened up, as you know, they have six operations in Mexico. And working with them and working on our plans to open up our processing center in Mexico will open up a lot of opportunity for our product in the Mexican market.

Our next question comes from David Gagliano with Credit Suisse. Your line is open.

I was wondering if you could explain the main drivers behind the relatively sharp sequential increases in both structurals and plate volumes in the second quarter. Was it market share, demand, something else and also how should we be thinking about those volumes for both plate and structurals in Q3?

The certain markets that have benefited both of those product lines. On the plate side, certainly a lot of energy business has helped us out there, everything from wind farms to other forms of energy activity. I’ll ask Joe to comment a little bit more on that in a second. On the beam side, keep in mind our beam operations also run a lot of piling products. We have very good, strong diversification of products on those two mills even outside the wide-flange and H-piling. So those products like the new HP-16 added to our ability to keep those plants running at high utilization levels. We’ve been very successful in a number of major piling projects. Joe?

Yes, Dan. I think you’ve really summarized it very well. The diversity and product range of our structural business, for piling in particularly, I think is one of the major factors that accounts for the increase in the beam business given the economy, the relative strength of the structural business. On the plate side, you are right, its energy, wind tower we have seen a slight pickup year-year-over-year in the heavy equipment, agricultural construction equipment, manufacturers business which has been while not good, by historical standards better than last year. Also we’ve seen just a little bit of pickup in our bridge work. We did a lot of product development over the last eight months to one year at the plate mills, and now have a better product offering for bridge, fabricators. So again, I think it’s product diversity in weak markets, but I think that product diversity has brought us a consistency in those two businesses that we might not have had a few years back.

Just a follow-up, how should we be thinking about the startup costs moving forward? Should they remain around that $40 million level? I’m assuming they should decline. If so when and what magnitude of decline should we be expecting in next few quarters?

Well, we should continue to see a decline in the third and fourth quarters from where things are today. I think we’re estimating somewhere in the neighborhood of $30 million to $40 million in startup costs in the third quarter.

Yes, the estimate we currently have is about $40 million, Dan, for the third quarter.

Then the last question, back on to the LIFO issue again it’s a tough one I know. If, for example, scrap prices just stay flat for the rest of the quarter, what should we expect the LIFO charge to be in Q3? Would it still be around that $45 million range you alluded to?

That’s right. It’s going to be $45 million or so if the assumptions we used at the end of June are the same assumptions, we used at end of September. And that will be based on what our view is at that point in time. Right now, I would use that as my estimate.

Our next question comes from Michelle Applebaum with Steel Market Intelligence. Your line is open.

I have a question about acquisitions. Both you and Dave Hannah have said consistently that M&A would be frozen for a while from September of ‘08 and then probably 18 months or so, you’ve seen more activity. I think your Steel Tech and your two scrap acquisitions and all that, we have seen more activity. Today, Dave was more bullish about acquisitions than I’ve seen him for two years now, I was wondering what your thoughts were about that?

First of all, Dave has got tremendous track record on that. So, I certainly would support what he is saying. From the timing standpoint, we both pretty much as you said pointed out 18 months ago that would be 18 months to two years before we started to see any significant indication of M&A activities. We still believe that it may stretch a little bit further than that now. But as you pointed out we’ve already done some M&A activity. Now, it’s all a question of not only the opportunities that might be out there, but the willingness of the participants to join in those opportunities. We still do expect to see an improvement from that standpoint going forward but I wouldn’t want to pinpoint exactly when I thought that would happen because that’s a big unknown. But, yes, the odds of that happening going forward from 18 months on is certainly greater than they have been for the past 18 months.

What about overseas? You’ve been kind of at the edge of doing a bunch of things overseas. You’d started one, when this mess happened. Given things going on in Europe, I was wondering if there would be more acquisitions and what kind of things would you be looking for, where are you looking?

Well, first off, we’ve never stopped looking. We’ve never stopped talking, and we’ve actually increased the number of folks that we have been talking to, some things have fallen off the radar, some things have been added on, it’s a continual process. Types of things that we’d be looking at are no different today as they would have been prior to the collapse in October of ‘08 and very consistent with our overall strategy that we got aligned very clearly to do the steel making operations, possibly some downstream operations as well as if they were to avail themselves. As we mentioned already, we have a start-up of new bar mill in Italy, and that’s gone well. So, Europe right now is probably a little bit more unsettled than we would like, but we still have active conversations going on as well as we do in other places in the world.

Your equity lines, thank you for putting that in your releases now, showed a really nice uptick from the prior quarter. You lost $18.4 million down to $7.4 million. I thought, wow, that’s Italy and then I remembered this probably is Steel Tech also, right?

Which line are you referring to Michelle?

Equity and losses of unconsolidated affiliates. Is that where Steel Tech’s showing up, is that where we saw an improvement from the first quarter?

Yes, that’s where Steel Tech is, and that’s also where Duferdofin is.

Can we infer from that, it’s a 60% improvement, that Steel Tech was profitable, accretive.

We would rather not get that specific, but there was improvement in the product of Nucor.

There was improvement.

Yes.

But you are not even giving me segments, so don’t blame me for asking.

Don’t blame me for asking at all and you got more than we usual give.

Our next question comes from Dave Martin with Deutsche Bank. Your line is open.

I believe you mentioned capital spending for Trinidad expansion. I was just wondering if you could give us a few more details on that as far as dollars to be spent, the scale of the expansion and the timing?

Certainly Ladd?

We spent somewhere in the neighborhood of $27 million, in the low 20s. We anticipate somewhere between 10% and 12% increase in productivity of that plant.

That’s to become effective next year?

That should go in by the first quarter of next year, and we expect (Inaudible) to put it in.

Then secondly, you had me curious on Castrip in the export market. What percent of your exports are Castrip volume and what types of customer applications are they being utilized for?

It’s a pretty small percentage of our total exports. If I had to put a number to it, I put it somewhere around 10% to 15% of the total exports. It’s going into a myriad of applications. Our pipe and tube is a big application for it, but frankly it’s been used in many, many applications. Construction markets, we’ve done a lot of looping, with it over there. That’s a popular application for it in South America. So, yes basically construction applications, rerolling applications to construction and pipe and tube.

Our next question comes from Timna Tanners with UBS. Your line is open.

I wanted to actually drill back down to the volumes and ask about after bars, because I noticed that not as a sequential but a year-over-year decline. So I was wondering if you have a little more color on that, especially given I thought we’ve had some ramp up at Arizona and maybe year-over-year into the Memphis mills, if you could elaborate on that?

It’s been very clear in the construction markets overall that things are worse this year than they were last year, and that’s because the backlogs that were present in the system have now all been worked off. So that had a general impact on the bottoming that has taken place in our long products businesses in 2010. Mike, do you have anything you’d like to add?

Just simple way to look at it going from rebar to merchant bar to SBQ. Right now, SBQ would be our strongest products that we have right now. The automotive business and the large manufacturing goods and those things are doing pretty well, but as you go down to and you get more into construction business that would be more difficult. Our Kingman operation is in the startup mode. And probably by the end of the year that will be running pretty consistently by then.

Just wanted to ask then, I think we’re getting closer to the startup of that (Inaudible) and wanted to get your latest thoughts about how that might impact you and you probably started to send some a little bit more perhaps in the market already and want to get your thoughts?

Well, we’re bringing on more capacity in a market that is running at significantly under 100% utilization. So, it’s going to affect the entire flat-rolled business across the entire North, South, Central, East marketplaces, won’t just affect Nucor by any means. It will be no doubt a negative impact, unless we see a significant upturn in the flat-rolled market and in that customer group. And how much of an impact will depend on how successful they are at getting started and when they say they are going to get started, and how they run once they get going. None of that’s yet happened.

Our next question comes from Mark Parr with KeyBanc Capital Markets. Your line is open.

Just two quick questions. One, I would like to get an update on the pig iron market in terms of what sort of pricing that you’re seeing, and also the sense of the supply-chain whether Brazil seems to be more engaged in restarting more capacity or the other way around. Then, secondly, would just like an update on how the commissioning of the 20-inch rounds is going in Memphis, and where you see the utilization of that operation potentially moving into next year?

Okay. Let’s talk pig iron first as in Brazil. In terms of the production it’s pretty much stabilized at this point. Pricing was up. It’s down a little bit. Today, it’s probably in the range of about $420 to $440 per ton. But that’s enough to keep them going delivered at $420 to $440 delivered to [Nola]. That’s enough, that pricing is substantial enough to keep the operations in Brazil going. So, we see pretty much stabilized operations at this point. Now, it’s also a function of what happens to iron ore costs for them going forward. So, that could change that situation.

The last thing that I read in the press on this was that there was, as John mentioned, a little bit of softening on prices, and how far that may change itself will depend upon exactly how are things playing out globally in the steel markets, but softening continues to take place in China if any elsewhere. Mike, do you have anything that you like to add about the Memphis situation?

The Memphis mill, the melt shop, all the operations are fully operational. The quality now has been very excellent. What we’re working on now is the consistent productivity and efficiency. We continue to supply trials and production volumes to Ford shops, the ring rollers, seamless tube manufacturers, and we’ve shipped product, to talk about exporting to India, Germany, Spain, Italy, Brazil, Korea and Mexico, as well as obviously domestic. We’ve gotten specific orders directly from Caterpillar and companies like that. We continue to work with the camshaft manufacturers, gearing and crankshafts. The customers continually say they love the quality of the product, and the way that operation is going. So, we just need to get more consistent on the productivity.

Mike, I just want to say congratulations on a great career and best wishes to you in your retirement.

Our next question comes from Mark Liinamaa with Morgan Stanley. Your line is open

Can you comment a little bit on kind of the pricing dynamic or the supply-demand dynamic that you’re seeing in the market, and by that the level of caution that the service centers maybe are creating whether as an industry you are seeing signs of the mills chasing volume down the price curve?

John, do you want to jump in?

We see a difference between what we would call apparent demand and real demand, and that’s impacting the service centers behavior. Right now, we feel that true demand, real demand is stronger than apparent demand, and that’s a function of lot things, one of which is the service centers due to the uncertainty holding back on their purchases and also a function of the integrated mills being late on some of that deliveries are causing some issues as a result of that finally catching up on their deliveries.

So would you characterize that it is sometimes the term discipline gets overused but would you think it’s been so far a rational response from the supply side and would you agree with the sentiment that we are approaching a bottom-end fundamentals?

No, we are not going to comment on that. Again, I would go back to the initial statement that you have to look at both apparent demand and real demand. As we talk with our customers and as we continuously meet and communicate with our customers, they tell us that although the demand is certainly down 20% to 30% from the high that they have seen in 2008, their real demand for their products has been pretty consistent throughout last year and the first half of this year.

We can add to that the fact that in a falling raw material pricing market, it would not be unusual at all for the service centers to be waiting to see when things settle out before they do any buying that would bring in their apparent demand back up to real demand as well and we do think that’s going off based upon conversation we’ve had with numerous customers. The other aspect is that because some of the mills were behind on deliveries they probably brought on a little bit more capacity sooner than they might have normally. We may see some of that continue or not continue depending upon where the market supports the production activity and so it’s a combination of all those things.

Our next question is a follow-up from Michelle Applebaum with Steel Market Intelligence. Your line is open.

I had a question for you about Louisiana. Is it confirmed if you build something in Louisiana that that’s something will be a blast furnace or are there other types of iron making that you might contemplate in Louisiana that might be less expensive?

Well, first off, one of the big things that as John mentioned that will impact the decision on what gets built there and when has to do with the way this whole carbon tax thing shapes out in Washington, whether we do it in Louisiana or we do it at some place else. But we have never stopped looking at alternative forms of technology whether it be high-smelt or because of the significant progress we made in the high-quality DRI we’re producing whether it be a DRI plant and so at this point in time we have not finalized exactly what technology would be put there and some of it may be determined by exactly what we see happening in Washington, which we hope is nothing.

Any color on time frame?

No. You can tell us what you’re going to do in Washington, and when we’ll give you a timeframe.

That’s right. Can I ask another question?

We will, I can tell you basically, we will do something.

You will do something in the Louisiana or you will do something?

We will do something. If we can we will do it on Louisiana.

Can I ask another question?

Sure.

John, I’m curious there has been some noise in the press, I am sure as you know what I am talking about without naming names. About one of your integrated competitors, either walking away or being asked to walk away, but terminating a relationship with the major OEM over an issue of surcharges, or not surcharges, you know what I am talking about there. I was curious to know if Nucor had any opportunity, given that that’s going on to expand some market share with this customer, and if you’ve seen any benefit from that?

We always are working to expand our business with our OEM customers and we’ve been continuously improving that, our position with them in all forms of OEMs. As a result we’re continuously moving up the value chain and continuously improving our quality. Without getting into any specific customers, I will say that, overall, our business with OEMs has been growing, it’s growing as a result of our service, our quality, our on-time delivery, and also a function of programs that we are offering that enable them to provide stabilized price in our scrap swap program that have been very successful with OEM customers.

Is it fair to say that the volatility of scrap is becoming less and less a competitive disadvantage for Nucor?

I’d just agree with it. That would higher our pricing moving towards a quarterly pricing mode from an annual pricing mode. The answer is yes. Probably, the same holds true for coking coal. But they are not quite yet amongst the pricing level, which is where scrap has been forever. So, it certainly has improved the dynamics of our competitive position, no doubt about it.

And that concludes our question-and-answer session for today. I now turn the call back to Mr. DiMicco for any closing remarks.

Thank you, Christy. I would like to thank all of you who’ve asked questions on the call and the teams for supporting our second quarter performance both here in Charlotte and around the company, and also for the investment community for supporting Nucor, you will not be disappointed. Thank you all very much.

That concludes our call for today. Thank you for your participation.