Located in Ellabell, Savannah, Georgia, U.S., the “Hyundai Motor Group Metaplant America (HMGMA).” (Image provided by Hyundai Motor Group)
SEOUL, April 13 (Korea Bizwire) — POSCO, South Korea’s largest steelmaker, is reportedly exploring a potential equity investment in Hyundai Steel’s upcoming electric arc furnace plant in Louisiana, a move that could mark a rare alliance between the nation’s top two steel producers as they look to navigate intensifying U.S. trade barriers.
If realized, the collaboration would represent a landmark partnership aimed at countering the renewed 25 percent steel tariffs imposed under the Trump administration’s second term. It also signals a strategic pivot by South Korean steelmakers, long strained by Chinese overcapacity and sluggish domestic demand, to secure access to the American market through localized production.
According to industry officials on Sunday, POSCO is reviewing multiple investment strategies tied to U.S. operations, including a stake in Hyundai Steel’s facility, which is slated to begin commercial production in 2029. The plant, designed to specialize in automotive-grade steel, will have an annual capacity of 2.7 million tons.
Hyundai Motor Group, Hyundai Steel’s parent company, plans to invest $5.8 billion (approximately 8.5 trillion won) in the project and is considering financing half of the cost through external borrowing. The group is currently in talks with affiliates and outside investors over equity participation — with POSCO emerging as a strong contender.
The U.S. accounted for around 13 percent of South Korea’s total steel exports last year, and POSCO shipped roughly 500,000 tons of hot-rolled steel to the country in 2024. However, Washington’s aggressive trade stance — including a tariff quota under Section 232 and subsequent 25 percent duties — has weighed heavily on South Korean exporters.
POSCO Chairman Chang In-hwa underscored in his New Year’s message the importance of delivering results in growth markets such as India and North America by advancing a fully localized supply chain strategy.
On March 12, the day the 25% tariffs on steel and aluminum announced by U.S. President Donald Trump are set to take effect, products are being manufactured at an aluminum goods factory in Hwaseong, Gyeonggi Province. (Yonhap)
Analysts suggest that co-investing in Hyundai Steel’s U.S. plant could help POSCO mitigate tariff risks while responding more swiftly to evolving American steel demand. The move would align with POSCO’s own domestic shift toward green steel, including a new 2.5-million-ton electric furnace facility under construction in Gwangyang, set to go online in 2026.
The Gwangyang project is a transitional step toward POSCO’s ultimate goal of carbon neutrality via hydrogen-based steelmaking (HyREX), and the potential alignment with Hyundai Steel’s electric arc furnace technology in the U.S. could offer operational synergies.
Despite growing speculation, a POSCO spokesperson said, “We are reviewing various strategic options related to U.S. investments, but no decisions have been finalized at this point.”
M. H. Lee (mhlee@koreabizwire.com)
