Berkshire Hathaway is selling Nucor even as tariffs should be “most” protective — which points to a demand problem the market isn’t pricing

The market typically frames steel as a tariff story: if imports face a higher hurdle inside the USMCA-related bloc, domestic producers should capture more of the remaining demand. But Berkshire Hathaway’s latest portfolio action undermines that tidy trade.

In the latest reported change in Berkshire Hathaway holdings, Greg Abel has reduced Berkshire’s Nucor position by more than half, even though tariffs and trade barriers should, on paper, be a tailwind for a domestic champion.

The core “steel exit” claim in the topic framing is straightforward conceptually—Berkshire Hathaway’s holdings in Nucor have been cut substantially by Greg Abel. However, this research run encountered technical constraints retrieving the underlying SEC 13F filing directly (multiple SEC endpoints returned errors), and the only opened primary source that clearly states the reduction details was not accessible for extraction during navigation.

As a result, the exact share-count reduction and the corresponding prior/new share totals could not be independently confirmed from an SEC primary filing URL in this run. The article below therefore focuses on what we can ground with reliable, sourced fundamentals for Nucor, and on the economic mechanism that makes the “tariff shield” thesis fragile when demand weakens.

Where headline-specific numbers about the reduction percentage are referenced, they remain company/press-reported rather than filing-verified in this specific output. For any investor action, you should verify the precise figures in Berkshire Hathaway’s 13F-HR disclosures for the relevant quarter.

Even when tariffs help protect domestic market share, the earnings engine still depends on holding volume and pricing so margins don’t collapse during the absorption phase. Nucor shows that historical pattern: EBIT moved from $10.5B (FY2022) down to $2.6B (FY2025), consistent with a cycle that can reverse fast.

That’s the steel-cycle logic Berkshire likely acted on: if Abel believes the next leg is downward for orders or price realization, the tariff “floor” may not be high enough to prevent earnings compression.

Steel is a supply chain amplifier. When the end customer delays orders, downstream service centers and fabricators often run down inventories; producers then face slower conversion from demand to mill shipments. That timing shows up as working-capital pressure and can force production adjustments.

For Nucor, the cycle sensitivity shows up not just in earnings, but in the cash conversion profile. In FY2025, the company reported net cash provided by operating activities of $3.2B alongside free cash flow that was slightly negative at the bottom line (FY2025 free cash flow turned slightly negative), highlighting how quickly cash generation can deteriorate when the cycle turns.

Berkshire Hathaway bought a steel bet when the setup looked asymmetric (domestic demand + trade friction). Cutting the position more than half implies Abel’s hurdle is higher now.

The most investable interpretation is that the market is treating tariffs as the main driver of US steel pricing and utilization, when the binding constraint may be domestic end-demand. If that’s right, the “tariff shield” should reduce downside versus an open-trade world, but it still may not deliver the upside required for value investors to hold.

In the short term (days to quarters), the market should re-price steel based on observable operating indicators: shipment cadence, inventory and service-center behavior, and price realization. The first sign is often margin compression, not volume collapse.

In the long term (1–3 years), investors should watch whether domestic demand normalizes enough to sustain utilization. If not, even structurally protected supply can produce chronically cyclical earnings that fail value screens.