Iron ore pellets brought in by ship via the 800-meter-wide Mississippi River are carried on a conveyor belt to a 100-meter-tall direct reduction plant (DRP). There, direct reduced iron (DRI), reduced with natural gas, is turned into molten steel together with steel scrap through an electric arc furnace.
The molten steel produced is solidified in a mold and made into intermediates such as billets or sheets, then becomes the final product after hot-rolling and cold-rolling processes. Products are shipped by land via the railroad extended into the plant and adjacent roads, or loaded onto ships at the port that brought in the raw materials and delivered to customers.
This is the look of the Louisiana steel mill that Hyundai Steel unveiled at the World Hydrogen Expo 2025 on the 4th at KINTEX in Goyang, Gyeonggi. Hyundai Steel introduced the plant using a diorama (3D scale model) that day.
The Louisiana steel mill is the world's first integrated electric arc furnace steel mill, which Hyundai Steel is building with $5.8 billion (about 8.548 trillion won). The plan is to build a 1.7 million-square-meter steel mill on a 6.68 million-square-meter site in southern Louisiana and produce 2.7 million tons (t) of steel products annually.
◇ Supplying higher-quality auto steel sheets than Nucor, clearing the U.S. tariff wall
About 70% of the products produced at the Louisiana steel mill will be made into steel sheets for automobiles. The United States has the world's second-largest auto market. It consumes 9 million t of automotive steel sheets annually, a figure expected to grow to 10 million t. However, due to the lagging U.S. steel industry, automakers are struggling to secure high-quality automotive steel sheets. Hyundai Steel aims to aggressively target this market.
The construction of the Louisiana steel mill is also a strategy to overcome export challenges stemming from steel and aluminum tariffs of up to 50% imposed by the Donald Trump administration. Hyundai Steel plans to prioritize supplying automotive steel sheets produced there to Hyundai Motor's Alabama plant 600 kilometers away, Kia's Georgia plant 720 kilometers away, and HMGMA (Hyundai Motor Group Metaplant America) 1,100 kilometers away.
Hyundai Steel focused on producing automotive steel sheets from the equipment planning stage. Electric arc furnace mills typically have a refining facility called vacuum oxygen decarburization (VOD). By contrast, the Louisiana mill is equipped with a new type of refining facility, the Ruhrstahl-Heraeus (RH) vacuum degassing process, to make high-strength automotive steel sheets. RH is more expensive than VOD, which mainly removes carbon from molten steel, but it can also adjust the gas content of hydrogen and nitrogen in the molten steel to increase steel purity.
Unlike typical electric arc furnace mills that mainly use steel scrap, adopting a direct reduction steelmaking process that uses DRI as the main raw material is also to produce high-quality automotive steel sheets. Because electric arc furnaces use steel scrap as a raw material, impurities such as copper that cannot be removed are included in the molten steel. Since high-quality automotive steel sheets cannot be produced when there are many impurities, the direct reduction steelmaking method, which can lower the proportion of steel scrap used, was adopted.
Through this, Hyundai Steel plans to increase steel purity even in electric arc furnaces to make products rivaling blast furnace output and to build differentiated competitiveness from local steel company Nucor, thereby supplying products to local automakers such as Ford and GM. It also plans to leverage the strengths of an integrated steel mill, where products are made from molten steel to finished goods in one place, to supply products tailored to diverse customer needs.
◇ Cutting carbon emissions to meet environmental rules… aiming for near zero with hydrogen reduction
Hyundai Steel also plans to meet demand from customers seeking to respond to environmental regulations such as the European Union's Carbon Border Adjustment Mechanism (CBAM) through the Louisiana steel mill. Steel produced through the direct reduction process emits up to 70% less carbon than the conventional blast furnace process that uses coal. It can reduce the environmental expense borne by automakers.
Hyundai Steel plans to introduce a carbon capture and storage (CCS) system at the Louisiana steel mill for the first time. It is a system that captures and treats about 70% of emitted carbon to reduce emissions.
A Hyundai Steel official said, "Even if we store captured carbon in the CCS facility within the plant, once it reaches capacity, it has to be moved, and if the distance is long, the expense is high," and added, "This was possible because there is a large-scale carbon storage facility in the adjacent chemical corporations complex."
Hyundai Steel recorded 18.09 million t of crude steel production last year and 26.58 million t of greenhouse gas emissions in CO2 equivalent (CO2eq). That amounts to an average of 1.5 t of greenhouse gases per 1 t of crude steel produced. Using the direct reduction process and CCS, the Louisiana steel mill is expected to cut greenhouse gas emissions to 0.6 t per 1 t of crude steel, emitting only about 1.5 million t annually.
Furthermore, Hyundai Steel plans to realize a near-zero steel mill with almost no carbon emissions by lowering the share of natural gas (CH4), used as a reducing agent (a substance that reduces other substances in a chemical reaction and is itself oxidized) in the direct reduction process, and using hydrogen.
To that end, it is also collaborating with POSCO, which has completed the design of a 300,000 t-class hydrogen reduction pilot process in Korea. POSCO is reportedly set to invest more than 1 trillion won in building the Louisiana steel mill.
A Hyundai Steel official said, "The Louisiana steel mill in the United States is significant as the world's first integrated electric arc furnace steel mill tailored for automotive steel sheets," adding, "By sharply reducing carbon emissions compared to the blast furnace process while supplying automotive steel sheets of comparable quality, we have secured competitiveness, and there is already strong interest from demand-side corporations."