Chung Eui-sun, chair of Hyundai Motor Group, said he wants to supply steel produced at a U.S. steel mill not only to automakers but also to rocket companies such as SpaceX. Steel for aerospace must withstand extreme temperatures and pressures, requiring high-level materials technology. The remarks are seen as expressing confidence in the quality of the steel to be produced at the U.S. mill.
Chung attended the groundbreaking ceremony for the "Hyundai Steel–POSCO Louisiana electric-arc-furnace steel mill (HPLS; HYUNDAI-POSCO Louisiana Steel)" held on the 4th (local time) in Donaldsonville, Ascension Parish, Louisiana, in the southern United States, and told reporters, "We are taking on new technology," adding the above.
HPLS is an electric-arc-furnace steel mill being built in the United States by Hyundai Motor Group and POSCO Group. Hyundai Motor Group invested 80% equity (Hyundai Steel 50%, Hyundai Motor 15%, Kia 20%), and POSCO Group invested 20% equity.
HPLS's biggest role is to supply steel for use at Hyundai Motor and Kia's U.S. auto plants. The plan is to produce key sheet steel for car bodies directly in the United States. Of HPLS's annual capacity of 2.7 million tons, Hyundai Motor Group will produce 1.8 million tons as automotive sheet steel, and apply 800,000 tons—about 44% of that—to Hyundai Motor and Kia vehicles built at their U.S. plants.
HPLS's key feature is combining direct reduced iron (DRI, iron made by removing oxygen from iron ore to produce solid-state iron), a steelmaking raw material, in the electric arc furnace to push beyond the performance limits of automotive sheet steel made by electric furnaces. By blending DRI, which has fewer impurities than scrap—the usual feedstock for electric furnaces—the plan is to raise quality to the level of premium automotive sheet made by blast furnaces. The direct reduced iron production facility (DRP) uses natural gas, so it emits less carbon dioxide than blast furnace processes that use coal.
Chung said, "We chose the electric furnace because it can reduce carbon dioxide emissions by 70% (compared with blast furnaces) and produce low-carbon steel, and the HPLS mill is taking on new technology by adding direct reduced iron (DRI) into the electric furnace," adding, "If we take on the challenge and succeed, we might be able to use it elsewhere as well."
Beyond automotive sheet steel, Chung cited humanoid Atlas and rockets as applications for HPLS products. Chung said, "The steel produced here should naturally be applied to Atlas," adding, "We would like to be able to supply steel to SpaceX and to these kinds of rockets as well."
The establishment of the HPLS electric-arc-furnace steel mill is a core project of the then $21 billion U.S. investment that Chung released at the White House in March last year. Chung said, "The United States will be able to buy high-value-added specialty steel, namely low-carbon steel, which it currently relies on imports for, here, and because we need to produce and use low-carbon steel and high-value-added steel to further improve the quality of vehicles produced in the United States, the (U.S. steel mill) has advantages for both sides."
Chung also said the investment decision in the United States was not made because of the tariff. When asked by reporters how much he expects tariff-burden relief from local steel production, Chung said, "It is difficult to convert into an amount," adding, "Tariffs are constantly changing now, so we will not be overly constrained by tariffs and will simply focus on producing better steel products here to raise vehicle quality."