By Bob Tita
Nucor Corp. said Chief Executive John Ferriola will retire at the end of the year and be replaced by veteran executive Leon Topalian, as the largest U.S. steelmaker navigates weakening demand from a decelerating industrial sector.
Mr. Ferriola, chief executive of the Charlotte, N.C. company since 2013, has been a staunch advocate of tariffs on imported steel that the Trump administration implemented last year. The 25% duty imposed on most imported steel in March 2018 drove up steel prices and swelled Nucor's profit in the months that followed.
But steel prices have fallen in the past year as manufacturing activity has slowed and customers work through their inventories rather than buy more steel. The benchmark price of hot-rolled sheet is down more than 35% to $575 a ton from a peak last July.
Falling prices contributed to a 43% decline in Nucor's second-quarter profit. The company in July reported steel shipments during the quarter slipped 7% from last year.
Nucor has pressed ahead with an aggressive build-out of its steelmaking capacity. The company earlier this year said it would spend $2.2 billion to expand and upgrade mills including a new plant in Kentucky. The company also is expanding in Mexico under a joint venture with a Japanese steelmaker.
Mr. Topalian, 51 years old, will face questions from investors and industry analysts about whether Nucor should delay some of the expansions until market conditions and steel prices improve. Most of the company's expansions and new facilities are scheduled to begin operating in 2021 and 2022.
Nucor's shares fell 0.56% to $50.07 on Friday. The stock is down nearly 21% over the past year.
Under Mr. Ferriola, Nucor pressed its advantage as one of the lowest-cost, most efficient steelmakers in the U.S., siphoning sales away from high-cost competitors such as United States Steel Corp. and ArcelorMittal SV. Nucor's annual sales during his tenure have risen 29% to $25 billion in 2018 and income soared to $2.36 billion. The company is the sales leader in the domestic steel industry and employs 26,700 people.
Mr. Topalian joined Nucor 23 years and was promoted to executive vice president two years ago. He will serve as president and chief operating officer this fall until moving into the CEO job Jan. 1.
Mr. Ferriola, 67 years old, joined Nucor 28 years ago. He is also chairman of Nucor's board. A company spokeswoman said a decision about the future of that post hasn't been made yet.