Commercial Metals Co.'s Q2 2025: Unpacking Contradictions in Rebar Pricing, Margins, and Mill Performance

These are the key contradictions discussed in Commercial Metals Company's latest 2025Q2 earnings call, specifically including: Rebar Market Pricing Dynamics, North American Margins and Volume Expectations, Arizona 2 Mill Performance, German Recovery Timeline, and Pricing Trends and Market Conditions:



Financial Performance and Market Conditions:
- CMC reported net earnings of $25.5 million for Q2 2025, or $0.22 per diluted share, with adjusted earnings of $29.3 million or $0.26 per diluted share.
- The company's North American Steel Group achieved a sequential increase in downstream backlog, despite challenging economic conditions.

Strategic Initiatives and Cost Management:
- CMC's operational and commercial excellence initiatives (TAG) are projected to deliver approximately $25 million of benefit over the remainder of fiscal 2025.
- The company is progressing on its Arizona 2 micro mill and other investments aimed at enhancing product capabilities and market reach.

European Market Improvement:
- CMC's Europe Steel Group reported a breakeven performance in Q2 2025, marking an improvement from the prior year.
- The improvement was due to reduced import flows, increased metal margins, and decreased energy costs.

U.S. Steel Market Dynamics:
- U.S. long steel metal margins are expected to expand heading into the third and fourth quarters, supported by improved scrap market conditions.
- CMC expects increased downstream backlog and pricing improvements, contributing to higher profitability in Q3.