South Korea-based steelmaker Posco is deepening its footprint in the U.S. market with a $582 million investment in Hyundai Steel’s new electric arc furnace steel mill in Louisiana, underscoring a broader shift by global suppliers to support automakers’ growing demand for domestically produced materials.
In a filing with the U.S. Securities and Exchange Commission, Posco said it will acquire a 20% stake in the project through a newly established wholly owned subsidiary by the end of 2027. The facility, first announced by Hyundai Steel in March, represents a $5.8 billion investment and is designed to produce up to 2.7 million metric tons of steel annually, primarily steel plates for the automotive sector.
Commercial production at the Donaldsonville, Louisiana, site is expected to begin in 2029. The plant will initially supply Hyundai Motor and Kia, with plans to expand sales to other U.S. automakers as demand grows. The location places the mill within close proximity to Hyundai and Kia vehicle plants in Alabama and Georgia, strengthening regional supply chains and reducing reliance on imported steel.
Posco said the investment will help establish a sustainable base for automotive steel production in North America, as automakers increasingly seek local sourcing to mitigate tariff exposure and supply chain risks. Hyundai Steel has cited strong U.S. steel demand and the need for stable, high-quality domestic supply as key drivers behind the project, which forms part of Hyundai Motor Group’s broader $21 billion U.S. investment commitment.
The Louisiana facility will be Hyundai Steel’s first production site outside South Korea, marking a significant expansion of its global manufacturing footprint. Beyond supplying affiliated automakers, the company aims to position itself as a broader supplier to the U.S. automotive industry.
The deal follows a memorandum of understanding signed in April between Posco and Hyundai Motor to collaborate on low-carbon steel production and battery materials. Posco has described the agreement as a strategic entry point into the North American steel market.
Posco has been steadily expanding its presence across the region. The company has partnered with Honda on a planned electric vehicle production hub in Canada, though the $11 billion project has been delayed amid weak EV demand and tariff pressures. It has also signed a separate MoU with Cleveland-Cliffs, with industry reports suggesting a potential investment of more than $700 million for a minority stake in the U.S. steelmaker.
These moves mirror a wider trend of Asian steel producers investing in North America to support nearshoring strategies. Most notably, Japan’s Nippon Steel recently completed its $14 billion acquisition of U.S. Steel, committing billions more to upgrade domestic mills. Industry analysts say such deals reflect a strategic realignment aimed at bringing steel production closer to end markets, as automakers and suppliers adapt to shifting trade and industrial policies.
