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Nucor (NUE +4%) and Steel Dynamics (STLD -1%) tend to both provide EPS guidance around the middle of the last month each quarter. And that was the case again this quarter. It was a little different this time because Nucor guided higher but Steel Dynamics guided lower. The two steelmakers tend to guide in the same direction, but not always.

• Nucor guided to Q2 EPS of $2.55-2.65, which was a good bit above analyst expectations. We did not get a ton of color from Nucor, but it did say earnings are expected to increase across all three of its operating segments, with the largest increase in the steel mills segment, which benefitted from higher average selling prices at its sheet and plate mills.
• On the other hand, Steel Dynamics guided to Q2 EPS of just $2.00-2.04, which is well below analyst expectations.
• Q2 profitability from its steel operations is expected to be significantly stronger than Q1, as metal spreads expanded with steel pricing increasing more than scrap raw material costs. Long product steel shipments improved sequentially, with flat rolled volumes contracting modestly due primarily to an inventory overhang from coated flat rolled steel imports.
• In terms of end markets, Steel Dynamics said that energy, non-residential construction, automotive, and industrial sectors continue to lead demand.

Despite the divergent guidance, the key similarity is that both steel companies are benefitting from higher selling prices. Also, selling prices appear to be increasing faster than scrap costs (a key input for mini-mills), which is resulting in expanding metal spreads. It just sounds like STLD is being impacted by a company-specific inventory overhang on the flat-rolled side. Taken all together, we think this guidance is generally positive for steelmakers.