The results of the November US elections have added downside risks to steel prices, primarily because of possible changes in the energy market and growing restrictions on data center construction. Analysts do not expect prices to fall sharply in the near term, however: imports remain constrained and the domestic market is still tight.
Democratic victories in the November 3 elections will give the party control of both chambers of Congress starting in January, allowing it to place greater limits on President Donald Trump’s agenda. But the immediate impact on the steel market is likely to be small. According to MEPS, market participants doubt that the Democrats’ success will lead to broad cuts or the repeal of 50% steel tariffs. Trump retains significant authority over trade policy, while the veto limits Congress’s ability to overturn existing measures.
Since the start of the year, US steel prices tracked by MEPS for its International Steel Report have risen substantially: hot-rolled coil is up more than 30%. Import tariffs introduced under Section 232 have been one of the main drivers of the increase.
Over the medium term, opposition to data center construction could have a greater impact on demand. Rising electricity bills, pressure on local infrastructure and residents’ discontent have prompted calls for tighter rules governing new projects. The issue featured prominently in the election campaign.
Over the past year, some local authorities have begun imposing moratoriums or bans on data center construction. Most restrictions apply to the approval of new projects rather than construction already underway, so the existing project pipeline can largely proceed. As a result, the impact on steel consumption in 2027 may be limited. But if new officials impose broader bans, delay previously approved projects or halt construction already underway, demand for beams, plate and other products could weaken sooner than expected.
Energy markets pose a more immediate downside risk to steel prices. Since the election, Brent crude has fallen by more than 10%. One reason is growing expectations that efforts to resolve the conflict with Iran could accelerate. Further progress in negotiations and the resumption of shipping through the Strait of Hormuz could put additional pressure on oil prices.
A prolonged decline in oil prices would reduce the cost of diesel, transportation and production, easing cost pressures on steelmakers worldwide. Cheaper transportation could also make imported steel more competitive.
At the same time, a return to oil prices of $70–80 per barrel could curb investment in drilling and energy infrastructure in the US. This would weaken demand for pipe, tube rounds and flat-rolled steel. Thus, cheaper oil could lower US steel prices through two channels: reducing production costs and cooling demand from the energy sector.
“The US midterm elections could affect two key factors currently supporting high steel prices: tariffs and data center construction. But even after control of Congress changes hands, major changes capable of lowering steel prices in the near term are unlikely,” said Laura Hodges, MEPS’ US market analyst.
Overall, the election results pose more downside than upside risks to US steel prices over the next 12 months, although an immediate downturn is unlikely. Constrained imports, producer pricing discipline and existing contracts should support the market through early 2027. Lower energy costs, possible trade policy concessions and the commissioning of new domestic steelmaking capacity could gradually ease the current supply shortage.
Hodges discussed the long-term outlook for the US market in the latest episode of the Speaking of Steel podcast. The discussion covered the assumptions behind the MEPS Steel Price Outlook. The new report provides five-year steel price forecasts for Europe, the US and Asia, as well as analysis of production volumes, raw material costs and economic prospects in each region.
MEPS publishes a more regular review of the US market in its International Steel Report. It includes steel price assessments, price indices, market commentary and 12-month forecasts for key markets in Europe, North America and Asia. MEPS invites readers to contact the company for subscription information.
