On March 25, Hyundai Steel announced its plans to establish an electric arc furnace (EAF) plant in Louisiana, USA, with the goal of commercial production by 2029.
This investment in the U.S. is a strategic decision aimed at securing new growth engines through the localization of automotive steel plate supply and transitioning to a long-term carbon reduction system.
The new electric arc furnace plant, with a production capacity of 2.7 million tons, will require a total investment of $5.8 billion. It will be the first electric arc furnace integrated steel plant in the U.S., featuring a consistent process from raw materials to finished products, allowing for the production of high-quality products while reducing carbon emissions compared to traditional blast furnaces.
The electric arc furnace plant will be specialized for automotive steel plates and will include facilities for producing Direct Reduced Iron (DRI), a raw material production plant (Direct Reduction Plant), and equipment for producing hot-rolled and cold-rolled steel plates, with an annual production capacity of 2.7 million tons.
Additionally, the facility will be strategically located near Hyundai's Alabama plant, Kia's Georgia plant, and the new HMGMA (Hyundai Motor Group Metaplant America), facilitating logistics cost reduction and the establishment of a stable supply chain.
Hyundai Steel plans to primarily supply steel plates for key strategic models to Hyundai, Kia, and other American automakers, as well as expanding its reach to the Latin American markets, including Mexico and Brazil, and local global automakers in Europe.
To ensure stable funding for this investment and enhance competitiveness in the U.S. steel market, Hyundai is negotiating joint investments with the Hyundai Motor Group and exploring equity investments with strategic partners.
This investment represents a significant strategic decision aimed at overcoming the domestic steel industry downturn while enhancing global brand recognition to secure new customers and maximize profitability.
Hyundai Steel aims to bolster future mobility competitiveness by locally producing high-quality automotive steel plates tailored for Hyundai, Kia, and global automakers.
Since the completion of the Dangjin Steelworks in 2010, Hyundai Steel has secured specialized technology and competitiveness in automotive materials. The construction of the electric arc furnace plant in the U.S. will facilitate direct production and supply of high-quality automotive steel plates, thus enhancing global brand value and driving local sales growth in the U.S.
Moreover, the U.S. steel market offers stable revenue-generating potential fueled by robust steel demand and high prices, along with lower energy costs and logistics savings compared to domestic operations, making cost competitiveness more accessible.
With over 70 years of experience in electric arc furnace operations, Hyundai Steel is poised to establish a reliable supply chain for global automakers and key customers through this investment.
By constructing an electric arc furnace plant capable of producing automotive steel plates and high-end products in the U.S., Hyundai Steel can promptly respond to diverse customer needs in both domestic and international markets.
With strong brand recognition in both the U.S. and globally, Hyundai Steel anticipates securing new customers for its domestically produced products, leading to synergies with its domestic production bases, such as the Dangjin Steelworks.
Hyundai Steel has a rich history in electric arc furnace operations, having produced approximately 1 million tons of automotive steel plates from 2007 to 2010. In October 2022, it successfully produced the world's first carbon-reduced high-strength sheet steel at a level of 1.0 GPa using electric arc furnace technology.
Additionally, in 2023, Hyundai Steel announced its carbon neutrality roadmap and is accelerating the development of carbon-reducing automotive steel plate technologies through a combined EAF-blast furnace process.
Looking ahead, once the carbon-reducing electric arc furnace production system is stably established in the U.S. through strong demand and infrastructure utilization, Hyundai Steel plans to quickly apply that system to domestic operations, accelerating the transition to carbon neutrality.
“We will secure a foundation for future growth by establishing global production bases and solidify our direction as a sustainable steelmaker,” said an official from Hyundai Steel.
