The construction project for 'Hyundai Steel-POSCO Louisiana Steel (HYUNDAI-POSCO Louisiana Steel·HPLS)', with a total investment of $5.8 billion (approximately 8 trillion won), is now on track. Hyundai Steel aims to respond to trade risks such as U.S. steel tariffs while directly producing automotive steel sheets locally, thereby securing the finished vehicle supply chain and positioning the United States as a core hub for its global high-value-added steel business.
According to industry sources on the 5th, the United States is the world's third-largest steel producer, having produced 82 million tons of crude steel last year, yet it imports more than 20 million tons of steel annually. In particular, imports of high-value-added rolled products such as hot-rolled and cold-rolled sheets and coated steel plates exceed 10 million tons per year, accounting for over 50% of total import volumes.
This is because the United States, the world's second-largest automobile producer after China, maintains steady demand for high-value-added steel products including automotive steel sheets. Steel prices are also at the highest level globally. In fact, recent domestic prices for hot-rolled steel sheets in the U.S. stand at approximately $1,200 per ton (t), which is more than 30% higher than those in Asia and Europe.
This forms the background behind Hyundai Steel's decision to construct an electric arc furnace-based HPLS steel plant. HPLS will be the first automotive steel sheet-specialized steel plant in the U.S. based on electric arc furnaces, and starting from 2029 when Yangsan begins operations, it plans to participate not only in the supply chains of Hyundai Motor and Kia but also in those of the broader U.S. finished vehicle industry. By adopting an integrated production system that produces everything from raw materials to finished products at a single location, it will enhance cost competitiveness.
Mitigating trade risks through local production is another key objective of the HPLS construction project. As the United States has strengthened tariffs on imported steel, South Korea's steel exports to the U.S. declined by approximately 8% compared to the previous year last year. Hyundai Steel plans to establish a direct production system in the U.S. to reduce burdens caused by import restrictions and stabilize supply chains with local customers.
The location also offers advantages for targeting the U.S. market. Donaldsonville, Louisiana, where the steel plant will be built, is equipped with land and sea logistics networks utilizing railways and the Mississippi River. It also boasts high accessibility to major finished vehicle production facilities such as Hyundai Motor's Alabama plant, Kia's Georgia plant, Hyundai Motor Group MetaPlant America (HMGMA), GM's Texas plant, Volkswagen's Tennessee plant, and Honda's Alabama plant. According to Hyundai Steel, this will lower raw material procurement and product transportation costs while strengthening connections with the U.S. Southern automotive industry belt.
Hyundai Steel intends to leverage HPLS as a core hub within the global automotive steel sheet supply chain. Building on its expertise in automotive materials accumulated since the completion of the Dangjin Steel Plant in South Chungcheong Province in 2010, it plans to expand this capability to the U.S. market and respond to diverse demands from both domestic and international customers. Additionally, based on the business foundation and brand recognition secured locally, Hyundai Steel will focus on expanding its overseas customer base and increasing exports of high-value-added steel products from domestic production hubs such as the Dangjin Steel Plant. A Hyundai Steel executive emphasized, "This project is not merely a steel plant construction but will serve as the starting point for the future steel industry."
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