Securing New Growth Engines by Entering the Robust U.S. Steel Market
Enhancing Brand Recognition Through Local Supply of High-Quality Products
Hyundai Steel is solidifying its status as a global steelmaker by constructing an electric arc furnace (EAF) steel mill in the United States specialized in automotive steel sheets.
Hyundai Steel announced, "We plan to establish an EAF steel mill in Louisiana, USA, with the goal of commencing commercial production in 2029."
This investment in the US is a strategic decision aimed at securing new growth engines through the localization of automotive steel sheet supply and transitioning to a mid- to long-term carbon reduction system.
The new EAF steel mill project in the US, with a total investment of $5.8 billion, will be the first integrated EAF steel mill in the country to feature a consistent process from raw materials to finished products. Compared to blast furnaces, it can produce high-quality products while reducing carbon emissions.
The integrated EAF steel mill will be specialized in automotive steel sheets and will consist of a direct reduction plant (DRP) for producing direct reduced iron (DRI), EAFs, and facilities for producing hot-rolled and cold-rolled steel sheets. The annual production capacity is expected to reach 2.7 million tons.
Additionally, its proximity to the Hyundai Motor Alabama plant, Kia Georgia plant, and the newly operational HMGMA (Hyundai Motor Group Metaplant America) will enable reduced logistics costs and the establishment of a stable supply system.
Hyundai Steel plans to primarily supply steel sheets for strategic vehicle models not only to Hyundai Motor and Kia but also to major US automakers. Furthermore, the company aims to target global automakers in Mexico, Brazil, and other Latin American regions as well as Europe.
To ensure stable funding and strengthen the competitiveness of its US steel business, Hyundai Steel is in discussions for joint investment with Hyundai Motor Group and is also considering equity investments with strategic partners.
This investment in the US is a large-scale project designed to overcome the domestic steel industry downturn, enhance global brand recognition, secure new customers, and maximize a profit-oriented business structure.
By producing high-quality automotive steel sheets locally and supplying optimized materials to Hyundai Motor, Kia, and global automakers, Hyundai Steel aims to contribute to strengthening the competitiveness of future mobility.
Since completing the Dangjin Steelworks in 2010, Hyundai Steel has secured specialized technology and competitiveness in the automotive materials sector. Based on this, the construction of the US EAF steel mill will enable direct production and supply of high-quality automotive steel sheets, which is expected to enhance global brand value and drive local sales growth in the US.
The US steel market, with its robust steel demand, high prices, and future growth potential, is a region capable of generating stable profits. Compared to Korea, it also offers advantages such as lower energy costs for natural gas and electricity, as well as reduced logistics costs, making it easier to secure cost competitiveness.
Through this investment, Hyundai Steel expects to establish a stable supply system not only for global automakers but also for key customers.
By constructing an EAF steel mill in the US, a market with high growth potential, capable of producing premium products including automotive steel sheets, alongside domestic production bases such as Dangjin Steelworks and Suncheon Plant, Hyundai Steel will be able to respond promptly to the diverse needs of both domestic and international customers.
Leveraging brand recognition in the US and globally, Hyundai Steel can also secure new customers for products manufactured domestically, creating synergy with production bases like Dangjin Steelworks.
Meanwhile, Hyundai Steel, with over 70 years of EAF operation know-how, has already produced about 1 million tons of automotive steel sheets using EAFs from 2007 to 2010. In October 2022, the company succeeded in the world's first trial production of 1.0GPa-grade carbon-reducing premium steel sheets using EAFs.
In 2023, Hyundai Steel announced its carbon neutrality roadmap and is accelerating the development of carbon-reducing automotive steel sheet technology through a hybrid EAF-blast furnace process.
Going forward, once a stable carbon-reducing EAF production system is established in the US by leveraging strong local demand and infrastructure, Hyundai Steel plans to rapidly expand this system to Korea, accelerating the transition to a carbon-neutral system.
A Hyundai Steel representative stated, "We will establish global production bases to secure a foundation for future growth and solidify our direction as a steelmaker capable of sustainable growth."
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