Hyundai Steel has officially launched construction of a major electric arc furnace steel mill in Louisiana, marking a significant step in Hyundai Motor Group’s efforts to build a more localized manufacturing and materials supply chain in the United States.
Hyundai Steel said Sept. 6 that it held a groundbreaking ceremony on Sept. 4 local time in Donaldsonville, Ascension Parish, Louisiana, for the Hyundai Steel-POSCO Louisiana Steel project, known as HPLS.
The facility is scheduled to begin construction in the fourth quarter of this year and is expected to start commercial production in 2029. Once fully operational, the plant will have an annual production capacity of approximately 2.7 million tons of hot-rolled, cold-rolled and galvanized steel products, including about 1.8 million tons of automotive steel.
The project represents a total investment of approximately $5.8 billion. Hyundai Steel will hold a 50% stake, while POSCO will own 20% and Hyundai Motor and Kia will each hold 15%.
The Louisiana plant is designed to serve as a major steel supply hub for Hyundai Motor Group’s growing manufacturing operations in North America. Its products are expected to be supplied to Hyundai and Kia production facilities in the southern United States and Mexico, while also providing an opportunity to supply other automakers operating in the region.
The project is particularly significant as automakers increasingly seek to secure local supplies of key materials amid rising trade barriers and growing supply chain uncertainty.
The United States currently imposes a 50% tariff on steel imports, making local production increasingly important for companies seeking to expand their presence in the American market.
For Hyundai Motor Group, the project will also help establish a more integrated production network in the U.S., connecting steelmaking with automobile manufacturing. The group has been expanding its investment in American manufacturing facilities, and the Louisiana steel mill is expected to become a key component of that broader strategy.
Hyundai Motor Group Executive Chair Chung Euisun said at the groundbreaking ceremony that steel produced at the facility would play an important role in the production of next-generation mobility products by Hyundai Motor Group as well as American automakers.
Unlike conventional blast furnace-based steelmaking, HPLS will employ an electric arc furnace process. The facility will produce direct reduced iron (DRI), a key raw material for steelmaking, before melting it together with steel scrap in electric arc furnaces.
The production system will cover the process from raw materials through steelmaking and subsequent hot-rolling, cold-rolling and galvanizing, enabling the facility to manufacture high-value-added automotive steel products locally.
Hyundai Steel expects the electric arc furnace-based process to reduce carbon emissions by approximately 70% compared with conventional blast furnace production. The company plans to position the Louisiana facility as a strategic production base for low-carbon steel as global automakers accelerate efforts to reduce emissions throughout their supply chains.
The location also offers logistical advantages. The plant is being built along the Mississippi River, providing access to maritime transportation, while major rail infrastructure is located nearby. These conditions are expected to facilitate the movement of raw materials and finished steel products.
The project is also expected to generate a substantial economic impact in Louisiana. Hyundai Steel estimates that the facility will create approximately 5,400 jobs, including around 1,300 direct positions.
Louisiana Gov. Jeff Landry welcomed the project, saying it would create quality jobs and generate new opportunities for businesses in the state.
Korea’s Industry Minister Kim Jeong-kwan, who attended the groundbreaking ceremony, described the project as more than the construction of a steel mill, calling it a symbol of industrial cooperation between South Korea and the United States.
The Louisiana project comes as Korean steelmakers face mounting pressure from weak global demand, excess production from China and higher raw material costs. At the same time, protectionist trade policies in major markets are making it increasingly difficult to rely solely on exports.
By establishing production capacity directly in the United States, Hyundai Steel aims to reduce exposure to trade barriers while gaining closer access to the high-value North American automotive steel market.
The company expects HPLS to become a key platform for expanding its U.S. business while supporting Hyundai Motor Group’s broader strategy of strengthening local production, securing stable materials supplies and developing lower-carbon manufacturing capabilities.
