Establishing 2.7 Million Tons Production Capacity
Expected to Reduce Logistics Costs by Proximity to Hyundai Motor Plants
Hyundai Steel will invest $5.8 billion (approximately 8.5127 trillion KRW) to build an electric arc furnace steel mill specialized in automotive steel sheets in the United States. The company plans to overcome the domestic steel industry's downturn by leveraging the solid demand in the U.S. market and secure new customers to improve its business structure.
On the 25th, Hyundai Steel announced plans to establish an electric arc furnace steel mill in Louisiana, USA, targeting commercial production by 2029. This U.S. investment is part of a strategic decision to secure new growth engines through localization of automotive steel sheet supply and to transition to a mid- to long-term carbon reduction system.
$5.8 Billion Investment... Establishing 2.7 Million Tons Production Capacity
The new electric arc furnace steel mill, with a total investment of $5.8 billion in the U.S., will be the first integrated electric arc furnace steel mill in the country with a consistent process from raw materials to finished products. Its advantage lies in producing high-quality products while reducing carbon emissions compared to blast furnaces.
This integrated electric arc furnace steel mill, specialized in automotive steel sheets, will consist of a Direct Reduced Iron (DRI) production facility (DRP), an electric arc furnace, and hot and cold rolled steel sheet production facilities, with an annual production capacity of 2.7 million tons. It is located near Hyundai Motor’s Alabama plant, Kia’s Georgia plant, and the newly operating HMGMA (Hyundai Motor Group Metaplant America), enabling reduced logistics costs and a stable supply system.
Hyundai Steel plans to primarily supply steel sheets used in strategic models of Hyundai Motor and Kia, as well as U.S. automakers, and aims to expand its reach to global automakers in Latin America, including Mexico and Brazil, as well as Europe.
To ensure stable funding and strengthen competitiveness in the U.S. steel business, Hyundai Steel is negotiating joint investments with Hyundai Motor Group and is also considering equity investments with strategic partners.
Enhancing Global Brand Awareness... Full Effort to Secure Customers
This U.S. investment is a large-scale project aimed at overcoming the domestic steel industry downturn, enhancing global brand awareness, securing new customers, and maximizing a profit-centered business structure. Hyundai Steel plans to produce high-quality automotive steel sheets locally and supply them to Hyundai Motor, Kia, and global automakers.
The U.S. steel market is considered a region capable of stable profit generation based on solid steel demand, high prices, and future growth potential. Compared to Korea, lower energy costs such as natural gas and electricity, along with reduced logistics expenses, provide an advantage in securing cost competitiveness.
Hyundai Steel explained that through this investment, it has established a stable supply system for major customers, including global automakers. Leveraging U.S. and global brand awareness, it will also be possible to secure new customers for domestically produced products, creating synergy with domestic production bases such as the Dangjin Steelworks.
In the future, once a carbon-reducing electric arc furnace production system is stably established by utilizing strong demand and infrastructure in the U.S., Hyundai Steel plans to rapidly expand this production system domestically to accelerate the transition to a carbon-neutral system.
A Hyundai Steel official stated, "We will establish global production bases to secure a foundation for future growth and firmly set the direction for a steel company capable of sustainable growth."
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