It’s been a down year for one of the commodities that props up a lot of the construction and manufacturing that goes on in this economy: steel. Prices for the metal have fallen about 40% since the start of the year. They’re also way down from unprecedented highs reached a few years ago, when demand for steel surged after the pandemic lockdowns.

Overall, steel prices have been on this roller coaster since 2020, said Josh Spoores, the head of steel analysis in the Americas at research firm CRU.

“We’ve seen just these really incredible price spikes, and then prices would crash. And then they jump back up again, as there’s just the slightest mismatch between supply and demand,” he said.

But with interest rates as high as they are, the industries that rely on steel aren’t demanding as much of it now. Construction spending has slowed down this year, and manufacturing activity has been kind of flat. So now, Spoores said, steel prices have dropped again and are “coming back into more of an equilibrium stage.”

Which isn’t great for all the new steel mills just now coming online in the United States. Those high prices a few years ago led a lot of domestic steelmakers to build new plants, he said. New tariffs were also making imported steel less affordable.

“We’ve seen a little bit more competition emerge between the mills, and that’s been depressing prices,” he said.

So has competition from outside the United States. China is a much bigger producer and consumer of steel, said Gordon Johnson, head of GLJ Research. And as the Chinese real estate market has cratered, so has the country’s steel demand, he said.

“China, because their economy is faltering so significantly, yet they’re still producing a lot of steel, they’re exporting their steel market weakness to the rest of the world,” he said.

But economies in the rest of the world aren’t really in a position to buy up that steel either, said Ian Lange, an economics professor at the Colorado School of Mines. 

“There’s just not another place around the world that looks like there’s going to be strong demand, and so the prices kind of take it on the chin,” he said.

And back in the U.S., it could be a while before demand picks up again, Lange said. “I think a lot of companies are in a holding pattern, just waiting to see what’s going to happen with the election or also with interest rates.”

That could keep them from investing in big projects. So it’s possible steel prices have more room to fall.