Steel prices still sliding despite labor concerns

It’s time for a contrarian moment. Sentiment is increasingly bearish after months of falling steel and scrap prices, uneven demand, increased capacity, and rising interest rates. That said, imports are down, and apparent steel supply is at its lowest since February. Also, imported hot-rolled coil (HRC) costs—once you account for freight, trader profit margins, and tariffs, among other things—are modestly higher than domestic prices (see Figure 1).

What if something unexpected happens—a strike, an unplanned outage, or another black swan? What if buyers, on the sidelines now, jump back into the market all at once?

I’m not saying the market is going to catch fire. It’s possible prices keep sliding downward. But it’s also worth considering whether the forest is dryer now than it’s been in a while.