Hyundai Steel Breaks Ground on Louisiana Electric Arc Furnace Plant, Will Produce 2.7 Million Tons of Low-Carbon Steel Sheets

$5.8 Billion Investment, 2.7 Million Tons Annual Production

Joint Venture by Hyundai Steel, POSCO, Hyundai Motor, and Kia

Aiming to Mass-Produce Low-Carbon Automotive Steel Sheets by 2029

Hyundai Steel will invest $5.8 billion (approximately 8 trillion KRW) to build a dedicated electric arc furnace plant for automotive steel sheets in Louisiana, USA, with an annual capacity of 2.7 million tons. The facility, set to begin mass production in 2029, will serve as a local manufacturing base to meet steel demand in the U.S. and reduce trade risks such as tariffs.

On the 4th (local time), key figures attending the groundbreaking ceremony of the HPLS (HYUNDAI-POSCO Louisiana Steel) electric arc furnace steel plant in Donaldsonville, Louisiana, USA, took the first shovel to mark the start of the plant construction. From the left in the photo are Inhwa Jang, Chairman of POSCO Group; Jeff Landry, Governor of Louisiana; Euisun Chung, Executive Chair of Hyundai Motor Group; Troy Carter, U.S. Representative; Jungkwan Kim, Minister of Trade, Industry and Energy; William Kimmitt, Deputy Undersecretary of Commerce for International Trade; and Boryong Lee, President of Hyundai Steel. Hyundai Steel

On September 4 (local time), Hyundai Steel announced on the 5th that it had held the groundbreaking ceremony for the HPLS (HYUNDAI-POSCO Louisiana Steel) electric arc furnace steel plant in Donaldsonville, Louisiana.

Attending the ceremony were Jeff Landry, Governor of Louisiana; William Kimmitt, Deputy Undersecretary for International Trade at the U.S. Department of Commerce; Jongkwan Kim, Minister of Trade, Industry and Energy; Kyungwha Kang, Ambassador of Korea to the United States; Euisun Chung, Executive Chair of Hyundai Motor Group; and Inhwa Chang, Chairman of POSCO Group. In total, more than 250 people participated in the event.

Executive Chair Chung stated, "The steel produced here will play a significant role not only for Hyundai Motor Group but also for American automakers in manufacturing next-generation mobility," adding, "It will also contribute to establishing the foundation for key industries such as artificial intelligence (AI) data centers and power generation."

HPLS is a joint venture steel plant invested in by Hyundai Steel, POSCO, Hyundai Motor, and Kia. The ownership structure is Hyundai Steel holding 50%, POSCO 20%, and Hyundai Motor and Kia each owning 15%.

The plant will be built on a 7.37 million square meter site in Donaldsonville, Ascension Parish, Louisiana. Construction will begin in the fourth quarter of this year, with plans to produce 1.8 million tons of automotive steel sheets and 900,000 tons of general-purpose steel sheets annually, totaling 2.7 million tons from 2029 onwards.

The plant will be equipped with facilities ranging from raw material production for direct reduced iron (DRI) using iron ore and natural gas, to electric arc furnaces, continuous casting, hot rolling, and cold rolling and galvanizing lines. The facility will achieve integrated operations by feeding DRI and steel scrap into electric arc furnaces to produce hot-rolled, cold-rolled, and galvanized steel sheets.

With the operation of HPLS, Hyundai Steel plans to participate in the automotive steel sheet supply chain not only for Hyundai Motor and Kia but also for American finished car manufacturers. Although the United States is the third-largest steel producer in the world, producing 81.9 million tons of crude steel last year, it imports more than 20 million tons of steel annually. Recently, U.S. domestic prices for hot-rolled steel sheet have reportedly averaged around $1,200 per ton, over 30% higher than prices in Asia and Europe.

Euisun Chung, Executive Chair of Hyundai Motor Group, is delivering the welcoming speech at the groundbreaking ceremony. Hyundai Steel

Donaldsonville offers advantages such as convenient land and sea transportation using railroads and the Mississippi River, proximity to natural gas complexes, hydrogen production bases, and carbon capture and storage (CCS) facilities. There is also excellent accessibility to major finished car manufacturing sites, including Hyundai Motor’s Alabama plant, Kia’s Georgia plant, and Hyundai Motor Group’s Metaplant America (HMGMA).

Local production will help mitigate U.S. import tariff burdens on steel. After the U.S. raised tariffs on some foreign steel products from 25% to 50% last year, Korea’s steel exports to the U.S. dropped by about 8%, from 2.76 million tons in 2024 to 2.54 million tons last year.

Hyundai Steel uses electric arc furnaces to reduce carbon emissions compared to blast furnaces, and plans to eventually replace natural gas used for direct reduced iron with hydrogen. Once the local production system stabilizes, Hyundai Steel will expand related technologies to its plants in Korea.

Furthermore, leveraging the customers and brand awareness secured in the U.S., Hyundai Steel plans to boost overseas sales of high-value-added products produced at its Dangjin and Suncheon plants.

A Hyundai Steel representative commented, "This project goes beyond the simple construction of a steel plant and marks the starting point of the future steel industry and hydrogen ecosystem."

This content was produced with the assistance of AI translation services.