NEW YORK: Hyundai Motor Group, which has spent two decades building cars in the United States, is moving further upstream to make the steel that goes into them.
Hyundai-Posco Louisiana Steel, the US$5.8bil electric-arc furnace steel mill planned in Louisiana, marks a new phase in the auto giant’s US expansion.
Set to begin commercial production in 2029, the project will supply Hyundai and Kia’s manufacturing operations in Alabama and Georgia, helping the group build a more integrated US supply chain from steel to finished vehicles.
The project is not just about localisation. Built around direct reduced iron and electric arc furnace technology, the mill is designed to produce high-grade automotive steel with substantially lower carbon emissions than conventional blast-furnace steelmaking.
Hyundai Motor Group has steadily expanded its US manufacturing footprint since opening an Alabama plant in 2005, followed by a Kia plant in Georgia in 2009 and recently Hyundai Motor Group Metaplant America, the group’s electric vehicle facility that began production in 2024.
Battery and parts suppliers have expanded alongside them.
Steel, however, has largely remained dependent on imports from South Korea or purchases from US steelmakers.
With US tariffs on imported steel reaching as high as 50%, local production has become increasingly important to Hyundai’s efforts to build a more resilient US supply chain.
The United States itself presents a sizable market. Despite being the world’s third-largest crude steel producer, it imported more than 20 million tonnes of steel in 2025. The United States is also the world’s second-largest auto producer, manufacturing 10.24 million vehicles last year.
Hyundai Motor Group currently has an annual US production capacity of about one million vehicles and plans to expand it to 1.2 million, providing a substantial market for locally produced automotive steel.
Once the Louisiana mill begins production, the group will have a US supply chain stretching from automotive steel production to vehicle assembly, mirroring the integrated model Hyundai established in South Korea with Hyundai Steel’s Dangjin plant in South Chungcheong Province.
Of Hyundai-Posco Louisiana Steel’s planned 2.7 million tonnes of annual production, about 1.8 million tonnes will be automotive steel, with the remaining 900,000 tonnes for other industries.
Hyundai Motor chief executive officer Jose Munoz made clear that the carmaker intends to use the Louisiana-made steel for as many US-made vehicles as possible.
“We want to utilise this steel for our cars produced in the United States,” Munoz told reporters after last Friday’s groundbreaking ceremony.
“We want to localise the utilisation of steel in our US factories, both in Alabama and Georgia.”
Hyundai Steel plans to supply automakers outside the group as well, targeting potential customers, including General Motors in Texas, Volkswagen in Tennessee and Honda in Alabama, as it seeks to expand its presence in the United States automotive steel market.
“This plant will be both our company’s first integrated steel mill dedicated to automotive steel sheets and the first of its kind in America,” Hyundai Motor Group executive chair Chung Euisun said at the ceremony.
“The steel produced here will support Hyundai Motor Group and other automakers as they build the next generation of mobility.”
The Louisiana facility will serve as a test bed for Hyundai Steel’s lower-carbon steelmaking strategy. — The Korea Herald/ANN
