The steel industry is investing in establishing production facilities in the United States. This is interpreted as a strategy to avoid high tariffs and steel import quotas likely to be implemented following the inauguration of the Donald Trump administration.
According to the steel industry on the 13th, SeAH Group's U.S. subsidiary, SeAH Superalloy Technologies, has decided to conduct a capital increase amounting to 183.7 billion won. This capital increase was pursued to secure 158 billion won in facility funds for establishing local production facilities. The capital increase involves SeAH Changwon Specialty Steel, a subsidiary that holds 100% equity in the corporation.
SeAH Superalloy Technologies is a company established by SeAH Group last year for 149 billion won to target the U.S. special alloy product market. SeAH Group aimed to secure new growth engines by producing high-value-added products compared to its existing core products, carbon steel and stainless steel, and to seize the growing global special alloy market centered around the U.S. The special alloy market size is expected to increase from $6.8 billion in 2021 to $15 billion in 2031.
SeAH Group has invested about 400 billion won in the U.S. market to date and plans to produce 6,000 tons of products annually in Temple, Texas, next year.
Hyundai Steel is considering plans to build a steel mill in the U.S. at a cost of about 10 trillion won. This aims to produce automotive steel plates to supply to Hyundai Motor and Kia factories in the U.S. Hyundai Steel reportedly plans to begin construction of the steel mill as early as the first half of this year, with operations starting in 2029.
POSCO had also expressed plans for overseas investments in North America and other regions to increase corporate value at the end of last year.
Korea's steel exports to the U.S. are limited to 2.63 million tons annually due to volume restrictions (quotas). The president-elect has even signaled a push for universal tariffs ranging from 10% to 20% on imports. As a result, domestic steel companies are increasingly investing in production facilities in the U.S. to avoid import quota systems and high tariffs.
The investments by domestic companies align with the policies of the president-elect, who advocates "Make America Great Again" (MAGA). Last month, he expressed "complete opposition" to the acquisition of U.S. Steel by Japan’s Nippon Steel, stating, "I will revive the U.S. steel industry through tax and tariff policies." The domestic companies' plan is to respond to the policies of the Trump administration by injecting costs into the U.S. in order to resurrect the U.S. steel industry, which requires new investments from outside.