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POSCO Holdings. (Photo=Yonhap News) |
[Alpha Biz= Kim Jisun] POSCO Group is reportedly considering joining Hyundai Motor Group’s planned U.S.-based steel mill project as an external investor.
According to industry sources on Sunday, POSCO is currently reviewing a potential investment in an electric arc furnace-based integrated steel plant that Hyundai Motor Company (KRX: 005380) intends to build through its affiliate, Hyundai Steel (KRX: 004020), in Louisiana, United States.
POSCO has been exploring the possibility of building its own plant in the U.S. as a strategic response to the tariff policies of former U.S. President Donald Trump. However, the company has hesitated to proceed due to the massive capital required and uncertainties regarding local demand.
Rather than constructing a plant independently, POSCO is reportedly weighing the option of acquiring an equity stake in Hyundai Steel’s Louisiana facility. This approach could mitigate investment risks while allowing POSCO to secure a portion of the steel products manufactured at the site. For Hyundai Steel, bringing in an external investor would help reduce the risks associated with developing the plant alone.
On March 24 (local time), Hyundai Motor Group Chairman Euisun Chung announced plans to invest KRW 8.5 trillion (approximately USD 6.3 billion) to construct a steel mill in the U.S. with an annual production capacity of 2.7 million tons. The announcement was made at the White House, with former President Trump in attendance. Hyundai intends to raise 50% of the investment (KRW 4.25 trillion) from external partners, and discussions with POSCO and Hyundai Steel are currently underway.
If the collaboration is finalized, the two leading South Korean steelmakers—ranked first and second domestically—would jointly establish a steel plant in the U.S. to counteract the 25% steel tariffs imposed by the country on imports, including those from South Korea.
POSCO is in a strong financial position to support such an investment. As of the end of last year, POSCO Holdings held KRW 6.77 trillion in cash and cash equivalents.
AlphaBIZ Kim Jisun(stockmk2020@alphabiz.co.kr)
