[SMM Global Steel Enterprise Special Report] A Detailed Analysis of US "Steel King" Nucor: 100% Electric Arc Furnace Forging High Profits, Vertical Integration Mitigating Cost Fluctuations Nucor Corporation is a company incorporated in Delaware in 1958. The company and its subsidiaries are engaged in the manufacture of steel and steel products. It also produces and procures ferrous and non-ferrous metal materials, primarily for use in its steelmaking operations. Most of its operating facilities and clients are located in North America. Its operations include international trading and sales companies responsible for buying and selling steel and steel products manufactured by the company and others. Nucor is also the largest recycler in North America, using steel scrap as the primary raw material for producing steel and steel products. In 2025, it recycled approximately 20 million gross tons of steel scrap. Operating Performance Data source: Nucor Corporation Annual Report、SMM Reasons behind the performance changes: ① Decline in gross profit: The primary reason for the decline in gross profit in 2025 was the compression of profit margins in the steel products segment. Due to lower average selling prices, gross profits from the grating and decking, building systems, and rebar fabrication businesses under this segment all experienced significant declines. ② Steel mill segment growth: In contrast, gross profit in the steel mill segment increased, primarily driven by higher sales and improved steel industry spreads. ③ Investment expenditures: Over the past three years, Nucor invested approximately $9.73 billion in capital expenditures and acquisitions, aiming to expand its product portfolio and enhance operational flexibility. Segments, Major Products, and Marketing Nucor reports its results in three segments: the steel mills segment, the steel products segment, and the raw materials segment. The steel mills segment is Nucor's largest segment, accounting for 62% of the company's sales to external clients for the fiscal year ended 2025. It primarily sells its products to steel service centers, manufacturers, and fabricating enterprises located in the US, Canada, and Mexico. In 2025, the steel mills segment sold approximately 19,848 kt of products to external clients. Data source: Nucor Corporation Annual Report、SMM The Steel Products segment primarily produces high-value-added downstream construction and industrial components, holding leading positions across the U.S. in multiple sub-segments including steel joists, prefabricated metal buildings, and insulated metal panels. It accounted for 29% of the Company's net sales to external clients for the year ended 2025. In 2025, total sales of major products in the Steel Products segment were approximately 1.478 million mt, including approximately 658,000 mt of steel joists and joist girders, approximately 436,000 mt of steel deck, and approximately 384,000 mt of metal building systems. Although physical sales volume (tonnage) was far below that of the Steel Mills segment, the per-mt selling price and profit margin were much higher than those of basic steel, and the segment also ranked first in market share across the U.S. in multiple areas. Data source: Nucor Corporation Annual Report、SMM The Raw Materials segment is the cornerstone of Nucor's vertical integration strategy, primarily operated through its wholly-owned subsidiary The David J. Joseph Company (DJJ), and manages DRI production facilities in Louisiana and Trinidad. By blending DRI with steel scrap, it supports electric arc furnace (EAF) production of higher-grade sheets & plates while ensuring cost advantages and supply security of raw materials. It accounted for 9% of the Company's net sales to external clients for the year ended 2025. In 2025, approximately 20 million gross tons of steel scrap were recycled and processed. Data source: Nucor Corporation Annual Report、SMM Clients and Markets Data source: Nucor Corporation Annual Report、SMM Major Development Projects in Recent Years The vast majority (91%) of Nucor's capital was allocated to internal construction (CapEx), strengthening core competitiveness through technology upgrades (such as electric arc furnaces and micro mills); a small portion was used for strategic acquisitions to achieve "outward expansion" into high-margin downstream areas. Through acquisitions such as SWDP, the company quickly entered high-barrier, high-growth sub-segments including data centers and green energy, making its business structure more resilient to cyclical downturns. Data source: Nucor Corporation Annual Report、SMM Core Logic of Vertical Integration for Cost Reduction: Raw Material Supply Structure Data source: Nucor Corporation Annual Report、SMM Core Risk Factors The greatest risk facing Nucor is a combination of internal and external challenges — internally, cost fluctuations in steel scrap and energy; externally, the impact of low-priced imported steel resulting from global (especially China's) overcapacity. Specifically: 1. Core Industry Risks ① Severe global supply-demand imbalance: Global steel surplus capacity reached 704 million net mt in 2025 (8 times US annual production). It is expected to further increase to 795 million mt by 2027. ② Regional impact: China's annual production has exceeded 1 billion mt in each of the past 8 years, and Chinese steelmakers continue to invest in new capacity in Southeast Asia and Africa. ② Import shock: This surplus leads to a flood of low-priced steel into the US market, creating significant downward pressure on Nucor's product prices, sales, and profit margins. 2. Production Cost Risks ① Steel scrap price sensitivity: Nucor uses 100% electric arc furnaces (EAF), with steel scrap being the largest cost item. Steel scrap prices fluctuate significantly and are beyond Nucor's control. ② Supply chain uncertainty: Although Nucor has achieved a degree of self-sufficiency through its DRI plants and DJJ recycling system, pig iron and iron ore pellets still rely on international procurement, facing geopolitical risks (e.g., Ukraine, Russia, Brazil). 3. Operational Challenges ① Energy-intensive nature: Steelmaking relies on large amounts of electricity (for melting) and natural gas (for heating and DRI production). ② Cost pass-through: Energy prices are affected by demand, the regulatory environment, and transmission infrastructure (pipelines/power grid), and cost surges may erode profits. 4. Compliance and ESG Risks ① Emission reduction pressure: The steel industry faces intense scrutiny due to greenhouse gas (GHG) emissions. ② Policy risk: Although Nucor's emission intensity is far lower than its blast furnace peers, increasingly stringent environmental protection laws and regulations may increase capital expenditures or restrict operations at existing facilities. 5. End-Use Market Risks ① Industry cyclicality: The steel industry is highly correlated with the macro economy. ② End-use market fluctuations: Nucor's largest market is non-residential construction. If this sector (e.g., commercial offices, industrial facilities) contracts due to high interest rates or economic recession, it will directly impact Nucor's performance severely. Copyright and Intellectual Property Statement: This report is independently created or compiled by SMM Information & Technology Co., Ltd. (hereinafter referred to as "SMM"), and SMM legally enjoys complete copyright and related intellectual property rights. The copyright, trademark rights, domain name rights, commercial data information property rights, and other related intellectual property rights of all content contained in this report (including but not limited to information, articles, data, charts, pictures, audio, video, logos, advertisements, trademarks, trade names, domain names, layout designs, etc.) are owned or held by SMM or its related right holders. 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[Short-Term Supply-Demand Resonance, Bullish Trend in Aluminum Prices Continues] Overall, the Middle East negotiation process experienced repeated setbacks, but the supply gap outside China and continued LME inventory drawdown supported LME prices to hold up well. China's aluminum ingot inventory remained at elevated levels, and attention should be paid to whether a turning point in domestic inventory can materialize smoothly.

[SMM Aluminum Price Weekly Review: Supply Shortages Outside China Supported Prices to Hold Up Well, China Focused on the Turning Point of Aluminum Ingot Social Inventory]

Precious metals are having a moment. Gold and silver surged to record highs in January, benefiting from an alignment of macroeconomic factors, evolving supply-demand dynamics, and renewed industrial demand.

Recently, Shanghai Hydrogen Era Technology Co., Ltd. (hereinafter referred to as "Hydrogen Era") dispatched four sets of its independently developed 1050Nm³/h Bristack®-Z series alkaline electrolyzers and supporting gas-liquid separation systems in batches to the project site of the China Energy Engineering Group Songyuan Hydrogen Energy Industrial Park. As the world's largest integrated green hydrogen, ammonia, and methanol project to date, the industrial park focuses on the layout of the entire industry chain of "green electricity for hydrogen production - hydrogen and ammonia production - hydrogen energy application". Upon completion, it will become a benchmark demonstration project for the comprehensive utilisation of hydrogen energy in north-east China. As a representative product of Hydrogen Era's Bristack®-Z series, the electrolyzers delivered this time adopt an advanced flow field design structure, ensuring more uniform temperature distribution and significantly improving electrolysis efficiency. They possess wide load adaptability and rapid dynamic response capabilities, enabling them to steadily cope with load fluctuations in wind and solar power-based hydrogen production scenarios, providing solid guarantees for the efficient use of green energy. Before the equipment was dispatched, Hydrogen Era conducted multiple rigorous tests on it using its self-built 10MW full-power testing platform. Certified by a third-party institution, the product's performance data have reached internationally leading levels, representing the excellent technical reliability and quality consistency of the Bristack®-Z series products. Hydrogen Era's 10MW Full-Power Testing Platform for Alkaline Electrolyzers The successful dispatch of the electrolyzers and gas-liquid separation systems this time marks another important milestone for Hydrogen Era in the field of hydrogen production equipment manufacturing. Previously, Hydrogen Era has successfully participated in the 8200Nm³/h hydrogen production project for Shanghai Electric's Taonan wind power coupled with biomass-based green methanol project and a 4000Nm³/h hydrogen production project in Shandong Province, accumulating rich project experience and technical strength. As an active practitioner of the "dual carbon" strategy, Hydrogen Era continues to reduce the production cost of green hydrogen through technological innovation and large-scale delivery, promoting the leapfrog development of hydrogen energy from an "alternative energy" to a "primary energy source".

Gree Electric Appliances (000651.SZ) released its 2024 annual performance report today, revealing a decline in revenue and an approximately 11% year-on-year increase in net profit attributable to the parent company's shareholders. Considering the performance of several leading home appliance producers that have already disclosed their results, it is an indisputable fact that the growth of traditional home appliances is sluggish, and finding new sources of performance growth has become one of the most important issues facing these producers. A reporter from Cailian Press noticed that in its 2024 annual report, Gree Electric adjusted its long-standing revenue composition classification, which may reflect a psychological shift in the company's approach to diversification. According to the financial report data, Gree Electric achieved operating revenue of 189.164 billion yuan in 2024, a 7.26% decrease from 2023, and a net profit attributable to the parent company's shareholders of 32.185 billion yuan, a 10.91% increase from the previous year. During the same period, the net operating cash flow of Gree Electric decreased significantly by 47.93% compared to 2023, and the weighted average return on net assets dropped by 1.11%. In comparison with peers, Gree Electric's performance report is not unexpected. The previously disclosed performance data showed that Midea Group (000333.SZ) achieved revenue growth of 9.44% and net profit growth of 14.29% in 2024, while Haier Smart Home (600690.SH) saw increases of 4.29% and 12.92% in these two indicators, respectively, compared to the previous year. Although the three home appliance giants have extended their business reach into more fields, home appliances still remain their highest-weighted source of revenue in terms of revenue proportion. Data shows that in 2024, the average revenue growth rate of the A-share home appliance sector was only 8.16%, and the average net profit growth rate was even lower at -43.27%, marking the lowest level in the past three years. With the traditional home appliance market showing signs of fatigue, seeking new growth space through diversification has become an inevitable choice for producers. Midea Group's main products now cover fields such as smart homes (including home appliances), new energy, smart buildings, and robots. In addition to consistently promoting refrigeration and washing products, Gree Electric has also expanded its main business to include industrial equipment manufacturing and green energy. Regarding diversification, a subtle change in Gree Electric's 2024 annual report is worth noting. A reporter from Cailian Press observed that in 2021, Gree Electric began classifying its revenue composition into seven categories in its annual report: air conditioners, household appliances, industrial products, intelligent equipment, green energy, other main businesses, and other businesses, a classification that was maintained until 2023. However, in the 2024 annual report, the revenue composition was adjusted to five categories: consumer appliances, industrial products and green energy, intelligent equipment, other main businesses, and other businesses. In other words, in the 2024 annual report, Gree Electric no longer separately discloses specific data for air conditioners and household appliances (mainly including refrigeration and washing products, kitchen appliances, etc.), and the same applies to industrial products and green energy. Against the backdrop of sluggish growth in the traditional white goods market, the expansion of Gree Electric's businesses beyond air conditioners has been a topic of great concern among investors. During the previous shareholders' meeting, topics such as refrigeration and washing businesses and Gree Titanium were also mentioned more frequently. However, according to public media reports, Dong Mingzhu still holds high expectations for Gree's refrigeration and washing businesses. As for Gree Titanium, Dong Mingzhu hopes that the outside world will give it room to grow. The adjustment in the classification of revenue composition has led to less focus on the specific progress of certain segmented businesses, which may align with Dong Mingzhu's expectation of "giving room to grow." However, Gree Electric's path to diversification obviously cannot completely avoid investors' attention. A long-term investor in Gree Electric previously revealed in an interview with a reporter from Cailian Press that they do not hold high expectations for the short- to medium-term performance contributions of Gree Electric's refrigeration and washing businesses or Gree Titanium. In terms of certainty, the competitiveness of Gree Electric's air conditioning products (especially in the high-end market) and the gradually expanding overseas market may be more worthy of attention.

As the earnings reporting season nears its end, annual reports and first-quarter reports for some publicly listed firms have begun to be released in rapid succession. By examining the revenue performance data of industry leaders, we can gain important insights into the future direction of the industry. Recently, Shanghai Silicon Industry Group Co., Ltd. (hereinafter referred to as "National Silicon Industry Group") successively disclosed its 2024 annual report and 2025 first-quarter report. The data shows that in 2024, the company achieved an operating revenue of 3.388 billion yuan, up 6.18% YoY; net profit attributable to shareholders of the listed company was -971 million yuan, down 620.28% YoY; net profit attributable to shareholders of the listed company excluding non-recurring gains and losses was -1.243 billion yuan, down 649.09% YoY. In terms of the first-quarter report, the company's total operating revenue was 802 million yuan, up 10.60% YoY, and net profit attributable to shareholders of the listed company was -208.5285 million yuan, down 5.47% YoY. In its annual report, the company stated that due to the impact of the market environment in the semiconductor industry, its operating revenue during the reporting period had not yet returned to the level of 2022. However, benefiting from a significant increase of over 70% in sales volume and over 50% in revenue of 300mm semiconductor silicon wafers compared to the same period in 2023, the company's total operating revenue during the reporting period rose 6.18% YoY against the trend. However, on the profit side, affected by the decline in industry prosperity, the average price of 200mm silicon wafers fell significantly. Coupled with factors such as the company's valuation adjustments for the acquired targets Okmetic and Xin'ao Technology, and the provision for impairment of goodwill of approximately 300 million yuan, the company's performance still faced short-term pressure. As one of the largest semiconductor silicon wafer manufacturing enterprises in the Chinese mainland, National Silicon Industry Group is mainly engaged in the R&D, production, and sales of semiconductor silicon wafers and other materials. It is the first enterprise in the Chinese mainland to achieve large-scale production and sales of 300mm semiconductor silicon wafers. After listing on the STAR Market in 2020, the company continued to make small profits year after year until it incurred a loss of nearly 1 billion yuan for the first time last year, exceeding the total net profit after listing. In the view of many industry insiders, 2024 was a year when both global silicon wafer shipments and sales revenue contracted. In recent years, the pace of localisation substitution for large-size silicon wafers has accelerated, but the continuous weakness in demand for consumer electronics has led to a pullback in shipment area and prices, thereby increasing the profit pressure on relevant producers. According to data from SEMI's Semiconductor Industry Network, global silicon wafer shipments fell 2.7% to 12,266 million square inches (MSI) in 2024, hitting a recent low, while silicon wafer sales revenue declined 6.5% to $11.5 billion in the same period. In the second half of 2024, global wafer demand began to recover from the industry downturn in 2023. However, due to weak end-use demand in some segments, it affected the utilization rate of wafer fabs and wafer shipments for specific applications, resulting in a slower pace of inventory adjustment. Ma Liang, an analyst at Guotai Junan Securities, believes that as a leader in the domestic semiconductor silicon wafer industry, National Silicon Industry Group's 300mm silicon wafer products have capacity scale and technological advantages in the Chinese mainland, providing a foundation for revenue growth driven by increased product shipments. Meanwhile, the company has continued to integrate its high-end silicon wafer business in recent years, collaborating with multiple subsidiaries such as Shanghai Xinsheng and Xin'ao Technology to target the high-end market, and still possesses competitive strength for long-term profitability improvement. It is worth noting that National Silicon Industry Group issued the first science and technology innovation corporate bond by a STAR Market-listed company in China in 2023. Recently, it reappeared in the exchange bond market, with its "25 National Silicon Industry Group MTN001" science and technology innovation note winning the bid at an interest rate of 2.4%, the company's lowest bond issuance coupon rate to date. Currently, the company has a total of three science and technology innovation notes with a cumulative amount of 2.84 billion yuan, and there are no bonds due within the next year. In terms of debt repayment indicators, due to the weakening of net profit and operating cash flow, the overall indicators show a downward trend. First-quarter report data shows that working capital was 2.84 billion yuan, and the cash ratio dropped to 1.19 times. Currently, the company's interest coverage ratio is -6.36 times, the lowest level in recent years. However, considering that the company can obtain support from various parties such as low-interest loans, bond issuances, equity financing, capital increases from industrial funds, and state-backed shareholders, and enjoys subsidy policies for R&D, its overall debt repayment ability remains relatively stable.

India's solar energy growth is significant. The market was worth USD 10.4 billion in 2023. Projections show a 13.4% CAGR from 2024 to 2030 and a USD 24.9 billion market.

[SMM Hot Topic: "Fivefold Trade Deficit! The Philippine Steel Industry Trapped in an 'Import Black Hole,' When Will Domestic Capacity Break Through?" — Detailed Analysis of the Philippine Chapter in ASEAN Steel Industry Development] According to the latest 2024 economic performance data of the ASEAN Six Major Economies, the Philippines ranks as the fourth-largest economy in ASEAN, with a real economic growth of 5.6% in 2024, an acceleration of 0.1 percentage points compared to the previous year. The GDP is approximately $462.3 billion. With a population of nearly 113 million, the per capita GDP is around $4,095. The Philippines relies on China for nearly 80% of its steel imports. A detailed analysis of its steel industry is as follows.

[SMM Hot Topic: "Fivefold Trade Deficit! The Philippine Steel Industry Trapped in an 'Import Black Hole,' When Will Domestic Capacity Break Through?" — Detailed Analysis of the Philippine Chapter in ASEAN Steel Industry Development] According to the latest 2024 economic performance data of the ASEAN Six Major Economies, the Philippines ranks as the fourth-largest economy in ASEAN, with a real economic growth of 5.6% in 2024, an acceleration of 0.1 percentage points compared to the previous year. The GDP is approximately $462.3 billion. With a population of nearly 113 million, the per capita GDP is around $4,095. The Philippines relies on China for nearly 80% of its steel imports. A detailed analysis of its steel industry is as follows.