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.
Much of the transport today is on the water of the Great Lakes and St. Lawrence Seaway, and is therefore cheap.
Transport of scrap still costs money. In fact, it costs more per mile because a lot of it is trucked, and that moving by rail is in loose carloads. Iron ore (and coal/coke) moves in more economically priced unit trains.
The processing of the ore to taconite is included in the price of taconite.
There is somewhat more capital investment for integrated mills, but there is also different capital investment as well. An electric-arc mill needs a lot of electric power infrastructure. Additionally, the integrated mill is much more easily scalable to a large size, which means economies in shipping and in material handling and site costs. The largest electric-arc mills are not over 1 million tons per year. Most integrated mills are in the 2-7 million ton per year range. The size again translates into better transportation pricing. Many integrated mills can suck up all the capacity on a 10,000 ton freight train every day. Most mini-mills would take 5 days to fill out a train that large.
Its really an apples and oranges comparison.