The first electric arc furnace-based automotive steel plant in the U.S. will be built by a South Korean company. Hyundai Steel is investing 8 trillion won to construct the HPLS electric steel plant in Louisiana.
The plant will have an annual production capacity of 2.7 million tons, with construction set to begin in the fourth quarter of this year and production expected to start in 2029. If completed as planned, it will be the world's first commercial production of automotive steel using electric arc furnaces.
On September 4, Hyundai Steel held a groundbreaking ceremony for the HPLS electric steel plant in Donaldsonville, Louisiana, aimed at producing high-quality, low-carbon steel products.
Attending the ceremony were Louisiana Governor Jeff Landry, William Kimmitt, Deputy Under Secretary for International Trade at the U.S. Department of Commerce, and U.S. Representatives Troy Carter and Julia Letlow, along with South Korean officials including Minister of Trade, Industry and Energy Kim Jeong-kwan, Ambassador to the U.S. Cho Hyun, and Consul General in Houston Lee Kyung-eun, among approximately 250 attendees.
Executives from POSCO Group and Hyundai Motor Group, who are co-investing in the HPLS plant, were also present. POSCO Group was represented by Chairman Jang In-hwa and Vice Chairman Kim Kwang-moo, while Hyundai Motor Group included Chairman Chung Euisun, President Lee Bo-ryong of Hyundai Steel, President Jose Munoz of Hyundai Motor, and President Song Ho-sung of Kia, among others.
The HPLS electric steel plant is a joint venture, with Hyundai Steel holding a 50% stake, POSCO 20%, and Hyundai Motor and Kia each holding 15%. It features a streamlined production process that allows for the production of raw materials and finished products in one facility, reducing carbon emissions by over 70% compared to traditional blast furnaces.
Hyundai Motor Group aims to secure a stable local supply chain for automotive steel in North America, while POSCO plans to establish a production and supply base for high-value, low-carbon automotive steel in the region.
In his welcoming remarks, Chairman Chung emphasized that the steel produced at the HPLS plant will play a significant role in the production of next-generation mobility vehicles for both Hyundai Motor Group and U.S. automotive companies. He noted that the HPLS plant marks the beginning of a more resource-efficient and sustainable future for the steel industry.
The investment aims to overcome high tariff barriers in the U.S. through local production. Last year, the U.S. imposed a 50% tariff on foreign steel under Section 232 of the Trade Expansion Act, leading to a decline in South Korea's steel exports to the U.S. to 2.54 million tons, down about 8% from 2.76 million tons the previous year.
Once operational, the HPLS plant is expected to significantly reduce import tariff burdens. Hyundai Steel will be able to address the supply shortage of high-value steel products for the U.S. automotive industry while providing a stable supply of automotive steel to Hyundai and Kia.
Despite being the third-largest steel producer in the world after China and India, the U.S. imports over 20 million tons of steel annually due to production not meeting demand.
The HPLS project is significant as it represents the largest production initiative by Hyundai Steel since the completion of the Dangjin steelworks in 2010. While Honorary Chairman Chung Mong-koo led the localization of automotive steel and the establishment of a supply chain through the Dangjin plant, Chairman Chung Euisun is expanding this initiative globally to establish a new global production system.
Once operational, Hyundai Motor Group will have a local production system in the U.S. that encompasses everything from steel materials to finished vehicles. Hyundai Steel plans to leverage its brand recognition built through local customer engagement to attract new clients in advanced markets like Europe.
A Hyundai Steel official stated, "This project is not just about building a steel plant; it will serve as a starting point for the future steel industry and hydrogen ecosystem."
* This article has been translated by AI.
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