On the 3rd (local time), Donaldsonville, about 101 kilometers from Louis Armstrong New Orleans International Airport in southern Louisiana. After riding a bus for about 1 hour and 10 minutes down a road flanked by vast sugarcane fields, a small wooden sign appeared on the ground in the grass reading "Hyundai Steel-POSCO Louisiana electric arc furnace steel mill (HPLS·HYUNDAI-POSCO Louisiana Steel) G zone entrance." This is the construction site of the first electric arc furnace steel mill being built in the United States through a joint investment by Hyundai Motor Group (80% equity) and POSCO Group (20%).
Each time a car passed over the boundless stretch of land, dust rose. Hyundai Steel, which is leading the mill's construction, has since February been carrying out site preparation to level and compact the 7.37 million-square-meter (about 2.23 million-pyeong) plot that used to be a sugarcane field.
Excavators, bulldozers, mobile generators, and dump trucks appeared here and there. The groundbreaking was held on the 4th, but the main construction is scheduled to begin in the fourth quarter, when permitting is completed. After about two years of work, the plan is to tap the first molten steel from the electric arc furnace in the first quarter of 2029 and begin commercial production.
The HPLS electric arc furnace steel mill is Hyundai Motor Group's first steel production facility in the United States. The core of this project is to establish a local supply chain from steel to finished vehicles by having Hyundai Steel supply automotive steel produced in the U.S. directly to Hyundai Motor and Kia's U.S. plants.
Hyundai Motor Group is building an automotive and steel production network centered in the American South. It currently operates a Kia plant and Hyundai Motor Group Metaplant America (HMGMA) in southern Georgia, and a Hyundai Motor plant in Alabama.
Louisiana, an industrial hub in the American South, was chosen as the local steel production base. Donaldsonville, Louisiana, where the HPLS electric arc furnace steel mill will be located, is considered a strategic point that has both maritime and overland logistics infrastructure, the key siting conditions for a steel mill.
Donaldsonville sits on the lower reaches of the Mississippi River. The Mississippi is deep enough to accommodate Panamax-class vessels of about 70,000 tons. HPLS plans to build a deep-water dock in cooperation with the Port of South Louisiana to transport steel raw materials and products. Nearby mainline routes of major railroads also make land transport advantageous.
A Hyundai Steel official met at the construction site said, "Because the Mississippi River is deep enough for Panamax-class vessels to enter, there is a big advantage in sourcing raw materials," adding, "Louisiana also has the lowest electricity rates and natural gas prices in the United States, making it an optimal site for a steel mill."
Through building the Louisiana steel mill, Hyundai Motor Group will be able to produce in the U.S. the steel needed for vehicles sold in the U.S. Of the annual capacity of 2.7 million tons, 1.8 million tons will be automotive grades. Hyundai Steel plans to supply 400,000 to 800,000 tons of automotive sheet to Hyundai Motor and Kia's U.S. plants.
The unpredictable tariff risk under the Trump administration is cited as a key reason Hyundai Motor Group decided to establish a local steel mill. To counter high automobile and steel tariff impositions, the group moved to increase the share of vehicles produced in the United States and build a steel supply chain that produces steel locally.
Hyundai Motor Group is considering expanding Hyundai Motor and Kia's U.S. production capacity by 50% by 2028, making local steel procurement even more necessary. As of last year, Hyundai Motor and Kia secured annual capacity of about 1 million vehicles in the United States. Hyundai Motor's Alabama plant can build 360,000 units a year, Kia's Georgia plant 340,000, and Hyundai Motor Group Metaplant America (HMGMA) about 300,000.
Currently, Hyundai Motor Group is considering more than doubling HMGMA's capacity, completed in March last year, to 700,000 to 800,000 units a year by 2028. If HMGMA's capacity is expanded to 800,000, Hyundai Motor and Kia's U.S. output will rise 50% to a total of 1.5 million vehicles annually.
Not all automotive sheet produced at the HPLS electric arc furnace steel mill will go only into Hyundai Motor and Kia vehicles. Hyundai Steel plans to sell the remainder, after supplying Hyundai Motor and Kia's U.S. plants, to U.S. finished-vehicle corporations.
The United States does not produce enough steel to meet its demand. Last year, U.S. crude steel output was 82 million tons, ranking third in the world after China and India. But production falls short of demand, and the U.S. imports more than 20 million tons of steel annually. In particular, flat products centered on high-value-added items such as hot-rolled sheet and cold-rolled galvanized sheet accounted for more than 50% of total U.S. steel imports.
A Hyundai Steel official said, "We believe low-carbon products made in electric arc furnaces can be fully competitive among automakers from a sustainability perspective."