Chairman Chung Eui-sun Makes an '8 Trillion Won Gamble,' Secures Trump's Key Ally to Build K-Steel Mill in the U.S.

[Donaldsonville, USA = Reporter Cho Eun-hyo] The groundbreaking ceremony for HYUNDAI-POSCO Louisiana Steel LLC (HPLS) was held on the 4th (local time) in Donaldsonville, a small town of 7,500 people in Ascension Parish, Louisiana, in the southern United States, known as the "land of American conservatives." As Hyundai Motor Group Chairman Chung Eui-sun took the stage to commemorate the start of construction of the first electric furnace-based integrated steelworks in the United States specializing in automotive steel sheets, with commercial production scheduled to begin in the first quarter of 2029 and a total investment of $5.8 billion (approximately 8 trillion won), about 250 U.S. political and government officials, including representatives of the U.S. federal government, the Louisiana state government, and the U.S. House of Representatives, who had gathered early, stood in unison to welcome Chairman Chung. Among them, Louisiana Governor Jeff Landry is one of President Donald Trump's key allies and the person who arranged Chairman Chung's visit to the White House last March.
Chairman Chung plans to transform this site, formerly a vast sugarcane field near the Mississippi River, into a steel mill with an annual production capacity of 2.7 million tons by 2029, capable of employing approximately 1,300 people, with an indirect employment effect of 4,100.
William Kimmitt, the U.S. Under Secretary of Commerce, who attended the event, emphasized, "A country that cannot produce steel cannot become a great power," adding, "Hyundai Motor Group boldly responded to President Donald Trump's request to expand U.S. production capacity." This symbolic scene simultaneously demonstrates the high level of local interest in HYUNDAI-POSCO Louisiana Steel LLC, the first project among Hyundai Motor Group's total $26 billion (approximately 2.85 trillion won) investment plans in the United States announced since the launch of the second Trump administration, as well as the favorable view of Hyundai Motor Group in U.S. political circles.
■ U.S. Establishes a 'From Molten Iron to Cars' Production SystemThe Hyundai Steel Company-POSCO Louisiana electric furnace steelworks project gained momentum as the Trump administration's policy goal of reviving U.S. manufacturing aligned with Hyundai Motor Group's strategic objective of expanding its presence in the U.S. market. Chairman Chung Eui-sun focused on three key areas: expanding local automobile production capacity in the United States, the need to enter the U.S. high-tech, high-value-added steel market, and strengthening ties with U.S. political circles and local communities to further expand the company's presence in the U.S. market.
Through the operation of its first K-Steel Mill in the United States, Hyundai Motor Group will strengthen its ability to respond to high steel import tariffs, with a tariff rate of 50%, while establishing a so-called vertical production system from molten iron to automobiles across the Southern Sun Belt region of the United States: Georgia, home to Hyundai Motor Group Metaplant America and the Kia plant; Alabama, home to Hyundai Motor Company; and Louisiana, home to Hyundai Steel Company.

The project proceeded at lightning speed. Hyundai Steel Company's Louisiana subsidiary was established approximately two months after Chairman Chung announced Hyundai Motor Group's investment plan of more than $20 billion in the United States with President Trump at the White House last March. By the end of last year, contracts with steel mill equipment and power companies in Italy, the United States, and elsewhere had been finalized. Then, in January of this year, the company succeeded in securing POSCO, a competitor and automotive steel supplier with a 20% stake in HPLS, making it the second-largest shareholder, as an ally.
Hyundai Motor Group is reportedly considering plans to increase its local production capacity in the United States from the current 1 million vehicles to 1.2 million. At the groundbreaking ceremony, Chairman Chung explained the rationale behind building the steel mill in the United States, stating, "Contrary to popular belief, responding to tariffs was not the primary goal." He added, "We are in a situation where we need to produce and use high-value-added, low-carbon steel to improve vehicle quality." If Hyundai Motor Group can procure high-grade steel locally in the United States, its efforts to penetrate the U.S. market are expected to accelerate. Last month, Hyundai Motor Group surpassed Ford Motor Company, the third-largest player in the U.S. market, recording its highest-ever market share of 12.9%.
■ Hyundai Steel Company Secures a Forward Base in the U.S. Steel MarketThe second strategic objective is to expand Hyundai Steel Company's presence in the global market. Chairman Chung noted that the United States faces a steel supply shortfall of approximately 20 million tons. Although the United States is the world's third-largest crude steel producer, after China and India, with production of 82 million tons, it imports approximately 20 million tons. Of these imports, flat products, including high-value-added products such as hot-rolled and cold-rolled galvanized steel sheets, account for half, or 10 million tons. Analysts say Nippon Steel Corporation's acquisition of United States Steel Corporation (U.S. Steel) last year served as a catalyst for Hyundai Steel Company's push to build a steel mill in the United States.
Hyundai Steel Company plans to actively pursue supplying not only Hyundai Motor Company, with 400,000 tons, and Kia Corporation, with 400,000 tons, but also North American automakers such as General Motors' Texas plant, Volkswagen's Tennessee plant, and Honda's Alabama plant. "Other automakers are also interested in HPLS steel, and we are already discussing supply with some of them," said Hyundai Motor Company President José Muñoz.
Against this backdrop, Chairman Chung specifically mentioned the North American premium automotive steel market, along with steel for humanoid robots, AI data centers, and rockets for SpaceX, as future areas of expansion, signaling his intention to actively target North America's high-value-added steel market. This is interpreted as the domestic steel industry seeking a breakthrough into high-value-added markets by establishing a local steel mill in the United States amid the triple burden of China's low-price volume offensive, protectionism in developed countries, and a stagnant domestic market.
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