- Commercial production to start in 2029; plant to produce 1.8 mnt/year of automotive flats
- HPLS to use iron ore reduction process that can shift from natural gas to hydrogen
South Korea’s Hyundai Steel and POSCO have broken ground on a new integrated steelmaking facility in Louisiana, with commercial production targeted for 2029. The $5.8 billion project, with a production capacity of 2.7 million tonnes (mnt), will combine direct reduced iron (DRI) production with electric arc furnaces (EAFs) and is aimed primarily at supplying automotive steel sheets to Hyundai Motor Group and other US automakers.
Hyundai Steel said on 4 September that Hyundai-POSCO Louisiana Steel (HPLS), the joint venture behind the project, held a groundbreaking ceremony in Ascension Parish, Louisiana. The project is the execution of an investment plan announced in March last year, with commercial production scheduled to start in 2029.
Hyundai Steel will hold a 50% stake in HPLS, while POSCO will own 20%. Hyundai Motor and Kia will each hold 15%.
The ceremony was attended by Hyundai Motor Group Executive Chair Chung Euisun, POSCO Holdings Chairman Chang In-hwa, Hyundai Steel President and CEO Lee Bo-ryung, Hyundai Motor President and CEO José Muñoz, and Kia President and CEO Song Ho-sung. Louisiana Governor Jeff Landry, US Under Secretary of Commerce for International Trade William Kimmitt, and South Korean Minister of Trade, Industry and Energy Kim Jung-kwan were also among about 250 participants.
Annual steelmaking capacity of 2.7 mnt
HPLS will have an annual production capacity of 2.7 mnt and will be built on an 1,822-acre site along the Mississippi River.
Danieli of Italy will supply the DRI plant and two electric furnaces, while Germany’s SMS will provide a 2.8-mnt hot-rolling mill and a 2-mnt pickling and cold-rolling mill.
The plant is expected to produce 1.8 mnt of high-quality automotive steel sheets using DRI. Of this, 800,000 tonnes (t) will be supplied to Hyundai Motor’s Alabama plant, Kia’s Georgia plant, and Hyundai Motor Group Metaplant America (HMGMA) in Georgia, which produces electric vehicles under the Hyundai, Genesis, and Kia brands.
The remaining output will be sold to other US automakers, while POSCO will also use steel from the facility through offtake arrangements in line with its ownership stake.
Hydrogen to support lower-carbon production
HPLS will use a reduction process that can gradually shift from natural gas to hydrogen for iron ore reduction. The companies also aim to develop a hydrogen ecosystem around the facility.
According to Hyundai Steel, CO2 emissions from the new process will be 70% lower than those from the blast furnace process used by the company in South Korea.
The project is expected to create 1,300 direct jobs and 4,100 indirect jobs. HPLS also plans to collaborate with Louisiana State University, which is working on next-generation steelmaking technologies, through a comprehensive research agreement.
The company highlighted the project’s contribution to the local economy and its cooperation with regional institutions.
Part of Hyundai Motor Group’s wider US investment
The Louisiana steel project forms part of Hyundai Motor Group’s broader US investment programme. The group has pledged $26 billion in US investment through 2028, with the $5.8 billion HPLS project included in that commitment.
Chung said steel would continue to play a major role as the US strengthens its manufacturing base and that the group was proud to contribute to the country’s vision and the future of “Made in America”.
For Hyundai Steel, HPLS will be its first integrated steelmaking facility outside South Korea.
For POSCO, the project provides a new US steelmaking base after the company withdrew from US-based UPI, leaving it without a flat steel production facility in the country. POSCO operates a continuous galvanising line (CGL) business in Mexico.
POSCO is also negotiating a partnership with US blast furnace producer Cleveland-Cliffs. However, Cleveland-Cliffs has indicated that it is not in a hurry to proceed amid high US steel prices.
As a result, HPLS is likely to serve as the main pillar of POSCO’s North American expansion in the near term.
Note: This article is published in accordance with a content exchange agreement between Japan Metal Daily and BigMint.
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