MOU for Mutual Cooperation in Steel and Secondary Battery Sectors
Joint Investment in Hyundai Steel's Louisiana Plant in the U.S.
Securing a Marketing Foothold for North American Automotive Clients
POSCO Group will participate in Hyundai Motor Group's steel investment in the United States to overcome tariff barriers. POSCO plans to invest in equity in the electric arc furnace steel mill that Hyundai Steel is scheduled to build in Louisiana, USA. The scale of the investment and the equity ratio will be determined through future discussions.
On April 21, POSCO held a signing ceremony for a "business agreement for mutual cooperation in the steel and secondary battery sectors" at Hyundai Motor Company's headquarters in Yangjae, Seoul. Through this memorandum of understanding (MOU), POSCO aims to establish itself as a top-tier supplier of future mobility steel and secondary battery materials, while Hyundai Motor Group plans to secure a stable supply of customized premium materials for its vehicle manufacturing operations.
In the steel sector, POSCO has decided to invest in equity in Hyundai Steel's U.S. steel mill. Through this move, POSCO has mapped out a blueprint to secure a foothold in the North American steel market, which has been restricted for over a decade due to protectionist trade barriers. Both companies plan to continue discussions regarding the equity ratio and investment scale following this MOU.
Through this joint investment in the Louisiana steel mill, POSCO will be able to supply materials smoothly to the United States and Mexico, establishing a flexible global production and sales system. POSCO currently operates steel processing centers in North America (the United States and Mexico), including an automotive steel sheet plant in Mexico, and has a diverse portfolio of automaker clients in the region.
This collaboration marks a "big deal" in which the top two domestic steelmakers join forces locally in the United States to break through tariff barriers. With the second Trump administration having already imposed a high 25% tariff on steel products, raising entry barriers to the U.S. market, this move is seen as a strategic choice by the domestic steel industry, which has been suffering for years from oversupply from China and sluggish domestic demand, to find a new breakthrough.
In the secondary battery materials sector, POSCO also plans to build a stable supply chain with Hyundai Motor Company to actively respond to the global electric vehicle (EV) market after the chasm?a period of temporary demand slowdown. In particular, POSCO aims to create sustainable collaboration opportunities in supply chain construction and next-generation material development by leveraging its competitiveness in secondary battery materials, including lithium and both cathode and anode materials, together with Hyundai Motor's eco-friendly future mobility technologies.
This alliance is part of POSCO Group Chairman Jeong Inhwa's "complete localization strategy," which has been a key focus since his appointment to strengthen the steel business's position in high-growth, high-profit overseas markets, as well as a strategy to flexibly respond to changes in the secondary battery materials market and prepare for the post-chasm era. It is reported that the two companies have been focusing their discussions on these topics since last year.
The signing ceremony was attended by Seokwon Han, Executive Vice President and Head of the Planning and Coordination Division at Hyundai Motor Group, and Jutae Lee, President and Head of Future Strategy at POSCO Holdings, along with other executives from both companies. President Lee stated, "Based on the synergy between our two companies, we will be able to find solutions for sustainable growth across all group businesses, including steel and secondary battery materials, in response to global trade pressures and paradigm shifts."
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