Chang In-hwa, chairman of POSCO Group, said that while POSCO and Hyundai Steel are competitors in Korea, their joint establishment of an electric-arc furnace steel mill in the United States aims to cooperate as Korean corporations on the global stage to raise the stature of our corporations worldwide.
On the 4th (local time), attending the groundbreaking ceremony for the "Hyundai Steel-POSCO Louisiana electric-arc furnace steel mill (HPLS; HYUNDAI-POSCO Louisiana Steel)" in Donaldsonville, Ascension Parish, Louisiana, in the southern United States, Chang met with reporters and said this while explaining the need for technological cooperation between POSCO and Hyundai Steel.
The HPLS electric-arc furnace steel mill will be established with Hyundai Motor Group investing 80% equity and POSCO investing 20% equity. Within Hyundai Motor Group, Hyundai Steel will hold 50% equity.
Regarding technological cooperation between POSCO and Hyundai Steel to secure competitiveness for the U.S. steel mill, Chang said POSCO's hydrogen-reduction steelmaking technology and automotive steel sheet technology will help. The U.S. mill will adopt a process that melts direct reduced iron (DRI, removing oxygen from iron ore to make solid iron) in an electric-arc furnace instead of using the existing scrap feedstock. It is a low-carbon process that reduces carbon dioxide emissions. However, some assess that it still falls short of the level of high-grade automotive steel sheets made via blast furnace routes.
Chang said, "The environmentally friendly, low-carbon process being built in the United States has not yet achieved the performance of the highest-grade steel sheets used in automobiles," and added, "For steel produced by the DRI electric-arc furnace method to become top-tier automotive steel, POSCO's hydrogen-reduction steelmaking technology and automotive steel sheet technology are essential."
Once the Louisiana mill is completed, it will secure an annual steel production capacity of 2.7 million tons. Of that, 1.8 million tons will be for automotive steel sheets. About 600,000 tons are slated to be allocated to POSCO.
POSCO chose not to build its own standalone steel mill in the United States and instead will secure U.S. production facilities through a joint venture with Hyundai Motor Group. It plans to use the Louisiana mill as a base for entering the North American steel market.
Chang said, "As the world becomes increasingly fragmented, steel or products for sale in the U.S. market must be produced in the United States," adding, "We already have many customers in the United States."