Iron ore pellets shipped by boat through the 800-meter-wide Mississippi River are loaded onto a conveyor belt and moved to a 100-meter-high direct reduction plant (DRP). There, direct reduced iron (DRI), reduced with natural gas, is turned into molten steel along with steel scrap through an electric arc furnace.
The molten steel is solidified in molds and made into intermediates such as billets or plates, then becomes the final product after hot-rolling and cold-rolling processes. Products are shipped by land via rail connected 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 steel mill in Louisiana, United States, revealed by Hyundai Steel on Jan. 4 at the World Hydrogen Expo 2025 held at Kintex in Goyang, Gyeonggi Province. Hyundai Steel introduced the plant's appearance through 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 an investment of $5.8 billion (about 8.548 trillion won). The plan is to build a 1.7 million-square-meter steel mill on 6.68 million square meters in southern Louisiana and produce 2.7 million tons (t) of steel products annually.
◇ Overcoming U.S. tariff barriers to supply higher-quality automotive steel sheets than Nucor
About 70% of the products produced at the Louisiana steel mill will be made into automotive steel sheets. The United States has the world's second-largest auto market. It consumes 9 million t of automotive steel sheets annually, which is 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 plans to aggressively target this market.
Building the Louisiana steel mill is also a strategy to overcome export difficulties caused by steel and aluminum tariffs of up to 50% imposed by the Donald Trump administration. Hyundai Steel plans to prioritize supplying automotive steel sheets produced here to the Hyundai Motor Alabama plant, 600 kilometers away, and to 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 process called vacuum oxygen decarburization (VOD). The Louisiana mill is equipped with a refining facility using a new type of Ruhrstahl-Heraeus (RH) vacuum degassing process to produce high-strength automotive steel sheets. RH costs more than VOD, which removes carbon from molten steel, but it can also control gases such as hydrogen and nitrogen to increase the purity of the steel.
Unlike general electric arc furnace mills that mainly use steel scrap, planning it as a direct reduction mill that uses DRI as the main raw material is also to produce high-quality automotive steel sheets. When steel scrap is used as the main raw material, it is difficult to remove impurities such as copper contained in the molten steel. Hyundai Steel says that by lowering the share of steel scrap with the direct reduction process, even an electric arc furnace can produce high-purity steel and make high-quality steel sheets comparable to blast furnace products.
Through this, Hyundai Steel plans to produce higher-quality products than those of local competitor Nucor and supply them to local automakers such as Ford and GM. In addition, it plans to leverage the advantages of an integrated steel mill, where everything from molten steel to finished products is made in one place, to supply products tailored to diverse customer needs.
◇ Cutting carbon emissions to meet environmental regulations… aiming for near-zero with hydrogen reduction
Hyundai Steel also plans to meet demand from customers seeking to comply with environmental regulations such as the European Union's carbon border adjustment mechanism. 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 mill for the first time. It is a system that can lower emissions by capturing and treating about 70% of the carbon emitted.
A Hyundai Steel official said, "Even if we store captured carbon in CCS within the plant, once the capacity is full it has to be moved, and if the distance is far, the expense increases," adding, "This was possible because there is a large carbon storage facility in an adjacent chemical corporations complex."
Hyundai Steel recorded crude steel production of 18.09 million t last year and greenhouse gas emissions of 26.58 million t in carbon dioxide equivalent (CO2eq). That means it emitted an average of 1.5 t of greenhouse gases per 1 t of crude steel production. Using the direct reduction process and CCS, the Louisiana mill is expected to lower greenhouse gas emissions to 0.13 t per 1 t of crude steel production and emit only about 330,000 t annually.
Going further, 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 another substance in a chemical reaction and is itself oxidized) in the direct reduction process and using hydrogen.
To that end, it is also working with POSCO, which has completed the design of a 300,000 t-class hydrogen reduction pilot process in Korea. POSCO is known to be investing more than 1 trillion won in building the Louisiana mill.
A Hyundai Steel official said, "The U.S. Louisiana steel mill is significant as the world's first integrated electric arc furnace tailored for automotive steel sheets," adding, "While greatly reducing carbon emissions compared with the blast furnace process, we have secured the competitiveness to supply automotive steel sheets with quality that does not fall behind, so there is already strong interest from demand-side corporations."