> ## Content Index > Fetch the complete content index at: https://steel-veritas.ghost.io/llms.txt > Use this file to discover other available public pages before exploring further. # SMU Atlanta August 24-26, 2026 - URL: https://steel-veritas.ghost.io/smu-atlanta-august-24-26-2026/ - Published: 2026-08-27T23:18:40.000Z - Updated: 2026-08-27T23:18:40.000Z - Author: David Adams | **Alert** August 27, 2026 **Industrial: Steel** **Steel - ALERT: SMU Steel Summit 2026 Takeaways** [Read Full Report](https://key2.bluematrix.com/links2/html/1fa1e4a8-36d4-4900-8ec8-d7c20f173a0f?ref=steel-veritas.ghost.io) We recently attended the SMU Steel Summit 2026 in Atlanta, featuring three days covering the current dynamics of the steel sector with various industry leaders. In this note, we highlight our main takeaways, including USMCA negotiations and imports in light of last week’s head fake on a U.S. and Canada tariff reduction; how the currently tight domestic supply backdrop might balance with steel pricing in the periods ahead; and end market demand. | | 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| | **Trade Drama and USMCA.** Fortress North America was a theme of the event, with AISI noting the importance of confronting global overcapacity, while STLD highlighted transshipping through Canada and Mexico (into the U.S.) and the need for more critical border enforcement by our neighboring countries. 50% S-232 tariffs that went into effect on June 4, 2025, have dissuaded imports, with 2025 steel imports down 10-15% y/y (sheet/strip down \~30% y/y) and 2026 steel imports down \~15% YTD (sheet/strip down >30% YTD). Steelmakers have also done what the Trump Administration wanted, with 2026 domestic production up \~6% YTD, 2026 utilization at \~79% (vs. 77% in 2025), and new investments. Many speakers discussed the need for clear, predictable tariff and/or quota guidelines, noting that melted & poured rules of origin are key to further incentivize U.S. production and investment, not just from the mills, but also their downstream partners. With the 2028 U.S. Presidential Election looming, we remind investors that both S-232 and S-301 remained in place under the Biden Administration. While steel/aluminum tariffs might not be top of mind for the average voter, there are plenty of companies and employees for which the metals trade landscape remains an important issue. Given the success of the mills since 50% tariffs were implemented, we do not envision tariff revocations under a new Democrat or Republican Administration. Last Wednesday, multiple media outlets reported the U.S. and Canada had reached a tentative deal to lower tariffs on certain Canadian steel and aluminum exports into the U.S. to 25% (from 50%). This was prior to a Friday conference call held by the White House with a group of industry leaders. Although things seemed to be moving toward a deal at the end of Friday’s business day, things fell apart shortly thereafter. Canada has now announced counter-tariffs of 50% (from 25%) on U.S. steel and aluminum products. Zekelman Industries CEO Barry Zekelman doesn’t see any way Canada wins this fight, advising Canada to find a way to “walk away with a black eye and not get its head kicked in,” but also recognizing the political popularity of opposing President Trump in Canada right now. As we said earlier, clear rules of order are key to these agreements, with Zekelman outlining his desire to invest \~$80M into a fully automated warehouse, but noting he is not comfortable making an investment like that until the trade relationship is resolved with surety between the U.S. and Canada. This is just one of many industry growth investments that hang in the balance of an uncertain trade backdrop. **Can Anyone Get Enough Steel?** Given the tariff constraints, most steel buyers have been struggling to get sufficient levels of steel for months, with contract tons limited and spot tons effectively unavailable in any real way. Service center inventories are down meaningfully YTD, but shipments have increased, leading to much tighter MOH figures. NUE echoed this sentiment, remarking that every service center customer wants more steel than they are getting right now. Given it was starting up new assets, STLD admitted it had a heavier contract mix heading into 2026, and will be less aggressive pushing massive contract tonnages in 2027\. Further, buyer complaints about persistently higher pricing in the face of frustrating mill performance (ever-extending quoted lead times + subpar on-time delivery) were common in our discussions this week. One analyst we heard from noted some of his clients are on allocation and not getting tons at all, with some of his clients buying imports for the first time ever. Service center consolidation is one solution to this issue, with the combinations of Ryerson/Olympic and Worthington Steel/Kloeckner making each entity a more powerful buyer from the mills. WS noted that more acquisitions are part of its go-forward strategy. With steel buyers under such pressure to get material and stay running, domestic prices have increased enough that imports have ticked up in recent months, albeit still at historically low levels. We would not be surprised to see more imports land in the months ahead, coinciding with seasonally softer 4Q26 demand, which likely portends a pricing decline in the September-October time frame. Seems like a pretty calm picture as we enter next year’s contract negotiations, right? CRU's HRC price hit $1,200/t this week for the first time since April 2023 vs. levels in the low-$800/t range at this time last year. While these levels are not expected to hold through 2027, most people we spoke with this week expect 2027 average HRC pricing to exceed $1,100/t and exhibit more seasonal monthly trends vs. 2026\. As the industry kicks off contract negotiation season, steel buyers want firm volume commitments and better delivery performance from mills, while the producers want higher fixed price contracts, lower CRU discounts, and tighter min/max tonnage ranges. We see 2027 contracts exhibiting the following features: thinner discounts for buyers vs. CRU (3-6% vs. 5-8% in 2026); rebates incentivizing buyer volume commitments; and rebates incentivizing better mill lead times and delivery performance. With so much up in the air, we expect this batch of contracts will take longer to resolve vs. more normal years. **End Markets.**Outside of the two bright spots we’ve been highlighting – data centers and the border wall – the **construction**market remains challenged. In general, high interest rates continue to stifle construction demand. With the next Fed meeting scheduled for mid-September, the market awaits a decision to either hold or raise rates, with next-to-no expectation of a rate cut. If and when a rate cut eventually happens, it generally takes 12–18 months for that to show up in non-residential demand vs. \~6 months to show up in residential demand. The urgency of data center projects is driving solid demand across the industry, with one speaker noting his expectation that this boom will follow a similar pattern to the chip factory buildout a few years ago. He expects annual data center capacity additions to likely peak in 2028 (quarterly peak in 4Q27) before falling in 2029-2031\. Another speaker noted that what was once considered a data center megaproject in 2019 is no longer considered a data center megaproject today given companies have dramatically increased their footprints. The average cost of a data center build now sits at \~$1,200/sq. ft. (vs. $600-$800/sq. ft. one year ago). **Automotive** has seen a portion of its steel reshored to the U.S., while there also have been tangible examples of OEMs shifting to steel (from aluminum) given the runaway MWTP this year. One speaker estimated this shift has represented \~400Ktpa, with more likely on the way. **Industrial** markets continue to expect pent-up demand will eventually release and have seen positive manufacturing trends in recent months. All told, we see overall real steel demand up 2-3% y/y in 2026 and expect relatively similar trends in 2027. | | **Valuation & Risks** **NUE (Overweight, $288 Price Target):** At the recent closing price of \~$252, NUE shares trade at \~8.1x EV/EBITDA on our 2026E and \~8.0x EV/EBITDA on our 2027E vs. a historical range of 6.5-9.5x. At the recent closing price of \~$252, NUE shares trade at \~13.3x P/E on our 2026E and \~13.4x P/E on our 2027E. At our price target of $288, NUE trades at \~9.2x EV/EBITDA on our 2026E and \~9.0x EV/EBITDA on our 2027E. At our price target of $288, NUE trades at \~15.2x P/E on our 2026E and \~15.3x P/E on our 2027E. Risks that could impede shares from reaching our price target include: weaker metal spreads vs. our model; changes in U.S. macro/demand momentum; and/or changes in the supply-side factors (new U.S. supply or imports). **RYZ (Sector Weight):** At the recent closing price of \~$26, RYZ shares reflect \~8.4x EV/LIFO EBITDA (ex-pension) on our 2026E and \~6.3x EV/LIFO EBITDA (ex-pension) on our 2027E vs. its average historical valuation of 5.5-7.0x. Including pension, valuation is 0.2-0.3x higher on our 2026E-2027E. Risks include: changes to commodity prices; U.S. and global demand trends; and capital structure changes. **STLD (Overweight, $262 Price Target):** At the recent closing price of \~$236, STLD shares trade at \~9.8x EV/EBITDA on our 2026E vs. its historical normalized multiple of 7-9x and \~14.2x P/E vs. its historical range of 10-15x. At our price target of $262, STLD would trade at \~10.7x EV/EBITDA on our 2026E and \~15.8x P/E. We are above the higher end of the historical range for our price target given our firm belief that ADI will see another material uplift in profitability in 2027 and as normalized EBITDA power begins to approach $3.5B. We see meaningful upside to the stated ADI through-cycle EBITDA range of $650M-$700M given current aluminum spreads, which should begin to become more visible in late 2026-1H27 given lag associated with customer qualifications, normal startup issues, and teething into a new market with established participants. Risks that could impede the stock from achieving our price target include: new domestic industry entrants (more capacity/supply); a slowdown in the U.S. industrial macro; changes in the U.S. dollar; and changes in net steel imports. **WS (Overweight, $46 Price Target):** At the recent closing price of \~$34, WS shares trade at \~7.0x EV/EBITDA on our current FY27E vs. its normalized trading range of 5.5-8.5x. Our $46 price target reflects \~9.2x EV/EBITDA on our FY27E, lending credence to the increased scale and synergy realization related to the KCO acquisition. At the recent closing price of \~$34, WS shares trade at \~13.5x P/E on our current FY27E EPS vs. WS's historical normalized range of 10-15x. Our $46 price target reflects \~12.3x P/E on the midpoint of our expected range of FY27 EPS with KCO of $3.50-$4.00\. WS expects to announce combined results with KCO for 1Q27 (Aug.). Given the DLTPA has not been completed and details around reporting structure remain foggy, we provide estimates for WS standalone and will wait until 1Q27 earnings are reported to establish a formal pro forma model. Key risks that could impede shares from reaching our price target include: M&A and JV execution; a slowdown in NAFTA automotive production and/or the pace of EV/Hybrid adoption; global transformer market growth; and steel pricing volatility. |