Hyundai Steel is considering establishing a steel industry base in the United States, including a steel mill. The plan is to use electric furnaces to produce automotive steel plates for supply to nearby Hyundai Motor and Kia factories in Georgia. It has been interpreted that a multi-trillion won investment is unavoidable to realize this, but it is also viewed that the company can effectively respond to the tariff barriers indicated by the Trump administration.
According to the industry on the 7th, Hyundai Steel is in discussions with multiple state governments, including Texas and Georgia, regarding investments aimed at constructing a steel mill for automotive steel plates. The amount and timing of the investment, as well as the production method, have not yet been determined, according to the company.
The steel mill that Hyundai Steel is pursuing in the United States is expected to adopt an electric furnace method, rather than a blast furnace, which has high carbon emissions. Considering Hyundai Motor Group's production capacity in North America, the scale of the steel mill being reviewed by Hyundai Steel is expected to reach several million tons.
Hyundai Motor Group currently has Kia's factory in Georgia (350,000 units per year) and Hyundai's factory in Alabama (330,000 units per year) and is set to complete the MetaPlant America (HMGMA) electric vehicle factory in the Savannah area of Georgia, which will produce between 300,000 and 500,000 units annually. Approximately 1 ton of steel plate is needed per vehicle, meaning at least an annual production capacity of 1 million tons is required just for the factories of Hyundai Motor Group.
The investment plan for the steel mill is interpreted as a response to the tariff policy of the impending Trump administration set to launch on the 20th. The President-elect Trump plans to impose a 25% tariff on products from Mexico and Canada, and a universal tariff of 10% to 20% on other countries. In this case, the competitiveness of overseas production would be significantly diminished due to lower labor costs.
Previously, during the Trump administration in 2018, the U.S. government introduced an annual import quota system of 2.68 million tons instead of imposing tariffs on Korean steel products.