POSCO to Fund Hyundai Steel's Project in the US
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Synopsis
On April 21, POSCO Group announced its investment in Hyundai Steel's U.S. steel mill project, responding to Trump's tariffs on steel imports. The collaboration aims to strengthen ties and develop battery materials for future mobility.
Key Takeaways
- POSCO Group to invest in Hyundai Steel's U.S. project
- Investment is a response to U.S. tariffs on steel
- Hyundai Steel plans a $5.8 billion steel mill in Louisiana
- Facility to produce 2.7 million tons of steel annually
- Collaboration to enhance automotive and battery sectors
Seoul, April 21 (NationPress) POSCO Group, the foremost steel producer in South Korea, announced on Monday that it plans to invest in Hyundai Steel Co.'s steel manufacturing initiative in the United States. This investment is a strategic response to the substantial tariffs imposed on steel imports by U.S. President Donald Trump.
A recent press release indicated that POSCO Group has entered into a memorandum of understanding (MOU) with Hyundai Motor Group to engage in Hyundai Steel's U.S. facility and to enhance cooperation in both the steel and rechargeable battery sectors.
Last month, Hyundai Steel disclosed intentions to invest US$5.8 billion to establish a comprehensive electric arc furnace-based steel mill in Louisiana by 2029, with production expected to commence in the same year, according to reports from Yonhap news agency.
The facility, designed to produce 2.7 million tons of steel annually, is anticipated to supply steel to not just Hyundai Motor Co. and Kia Corp., but also to various other automotive manufacturers within the U.S., recognized as the globe's most significant automobile market.
POSCO's decision to invest follows the imposition of 25 percent tariffs on all steel and aluminum imports by the Trump administration in mid-March.
Previously, POSCO Group stated it was giving serious consideration to investments in upstream steel processes within the U.S., with equity participation being one of several strategies under evaluation.
"We have not yet determined the size of our stake in the plant project. Discussions will begin soon to decide the investment ratio and other related matters," a POSCO spokesperson remarked.
In a recent communication to employees, POSCO Group Chairman Chang In-hwa emphasized the pressing need for global expansion.
"With a sense of urgency that the company may lag behind if it does not act promptly, we must invest in steel mills located in rapidly growing and high-margin regions, such as the U.S. and India, to achieve significant outcomes," he stated.
POSCO Group anticipates that the MOU will fortify its five-decade-long partnership with Hyundai Motor Group, as POSCO is a key provider of automotive steel to the manufacturer.
According to the initial agreement, POSCO will supply steel produced at the new Louisiana facility to clients in the U.S. and Mexico, while also collaborating with Hyundai on the development of materials for rechargeable batteries to facilitate future mobility solutions.
