[Alpha Biz= Kim Jisun] South Korea’s leading steelmakers, POSCO and Hyundai Steel, have finalized a joint investment of $5.8 billion (approximately KRW 8.56 trillion) to establish a new steel plant in the United States. Hyundai Steel, along with Hyundai Motor Group, will contribute 80% of the equity, while POSCO will account for the remaining 20%.
According to announcements on December 16, both companies will make equity contributions for the U.S. electric arc furnace (EAF) integrated steel plant in Louisiana. Earlier in March, Hyundai Motor Group disclosed plans to build a 2.7 million ton-per-year EAF plant in Louisiana to supply high-quality automotive steel for its U.S. operations under Hyundai MetaPlant America (HMGMA), with commercial production targeted for 2029. In April, POSCO Holdings also announced its intention to invest in the Louisiana project.
Hyundai Steel stated that the Louisiana plant will focus on automotive-grade steel production, supplying annual volumes of hot-rolled and cold-rolled coated steel sheets. The total investment of $5.8 billion will be funded 50% through equity ($2.9 billion) and 50% through external debt ($2.9 billion). Equity contributions will be structured as follows: Hyundai Steel 50% ($1.46 billion), POSCO 20% ($580 million), Hyundai Motor 15% ($440 million), and Kia 15% ($440 million).
The Louisiana EAF plant will feature a direct connection between the direct-reduced iron (DRI) production facility and the electric arc furnace. This integration is expected to enhance energy and transportation efficiency and increase the proportion of DRI used, enabling production of high-end automotive steel and other premium steel products.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
