The new producers were cheaper because they were more productive labor-wise since they weren't locked into old time labor contracts and were not burdened with costly health and pension payments. Materials for an integrated mill were and are cheaper than scrap, which is why a good integrated mill located close to the sources of its materials will always be more efficient than a scrap fed mill.
There is also the little issue of sourcing scrap if you do not forge new iron. The mini-mills are only able to exist because we either import pig iron or steel slabs, or make it ourselves.
Lastly, mini-mills benefit from lower transportation costs in regions without integrated mills, because many of them have been built in areas of the country devoid of natural resources, but which still have a ready market for product. The integrated mills are mostly tied to the Great Lakes and the Quebec and Minnesota Iron Ranges, and therefore their nearby customer base of midwest auto plants and appliance/office furniture manufacturers.
Ummmmnhhh...
I don't take exception to any of your post, except indirectly--
While it's true that ore costs less than scrap steel, it also takes a LOT more capital investment to 1) get the ore; 2) transport the ore; 3) process the ore.
While union-labor may add some fraction of a penny/pound of finished goods, I think the cost of capital investment is rather significant.
So the lowering the costs is to be based on the lowering the wages, reducing/eliminating the health expenses and retirement.
Is it the freemarketeers idea of progress? What about the progress based on technological improvement?