Seoul: POSCO Group, South Korea's leading steelmaker, announced its decision to invest in Hyundai Steel Co.'s steel mill project in the United States. This move is part of POSCO's strategy to address the imposition of tariffs on steel imports by the U.S. government under President Donald Trump.
According to Yonhap News Agency, POSCO Group has entered into a memorandum of understanding (MOU) with Hyundai Motor Group. This agreement will facilitate POSCO's participation in Hyundai Steel's U.S. plant, and it aims to enhance collaboration between the two companies in the steel and rechargeable battery sectors.
POSCO Holdings President Lee Ju-tae emphasized that the partnership will enable POSCO to pursue sustainable growth in its businesses, from steel manufacturing to rechargeable batteries, by capitalizing on the synergies between the two firms. This collaboration comes in response to global trade pressures and a changing industry landscape.
Hyundai Steel recently announced its intention to invest $5.8 billion to construct a steel mill in Louisiana. The facility, based on an electric arc furnace, is expected to commence production in 2029, with an annual output of 2.7 million tons. The steel mill will supply materials to Hyundai Motor Co., Kia Corp., and other automakers in the U.S., a key market for the automotive industry.
POSCO's decision to invest follows the U.S. administration's imposition of 25 percent tariffs on steel and aluminum imports. The company had previously indicated that it was seriously considering investing in upstream steel processes in the U.S., with equity participation being one of the possible options.
A POSCO spokesperson mentioned that the size of the investment stake in the plant project is yet to be determined, with discussions planned to finalize the investment ratio and related details. POSCO Group Chairman Chang In-hwa highlighted the necessity of global expansion, urging the company to invest in steel mills in rapidly growing regions like the U.S. and India.
POSCO anticipates that the MOU will strengthen its long-standing partnership with Hyundai Motor Group, as POSCO is a primary supplier of automotive steel to the automaker. The initial agreement outlines POSCO's role in supplying steel from the new Louisiana plant to customers in the U.S. and Mexico, and collaborating with Hyundai on rechargeable battery materials for future mobility solutions.
In North America, POSCO operates a steel processing center in the U.S., a steel processing facility, and an automotive steel plant in Mexico. Hyundai Motor Group has been expanding its partnerships with global suppliers to secure key materials for rechargeable batteries, including lithium and anode materials, for its next-generation vehicles. The group targets selling 3.26 million all-electric vehicles globally by 2030, significantly increasing from the 397,355 units sold last year.