Park Jae-hyuk is a seasoned journalist who has provided comprehensive coverage of South Korea's corporate dynamics, economic policies, industry challenges and the global positioning of Korean companies. Based on the articles he has written since joining The Korea Times in 2016, his investigative approach has helped readers understand corporate governance, economic trends and business strategies shaping South Korea’s economy.
POSCO, Hyundai Motor groups form partnership in steel amid US tariff threats
POSCO Holdings President Lee Ju-tae, right, and Hyundai Motor Group Executive Vice President Hahn Suk-won pose after signing a memorandum of understanding regarding the two companies' cooperation in steel and rechargeable battery sectors at the automotive group's headquarters in Seoul, Monday. Courtesy of POSCO Group
By Park Jae-hyuk
Steelmaking group to invest in Hyundai Steel's US plant
POSCO Group and Hyundai Motor Group marked an unusual alliance, with the former investing in a U.S. plant construction for the latter's steelmaking subsidiary, Hyundai Steel.
The agreement between Korea's two largest steelmakers comes amid the Donald Trump administration's 25 percent tariff on steel imports.
Although both companies have been cautious about linking the investment directly to the U.S. tariffs, they cited the rapidly changing global trade environment as the main reason behind the partnership.
The steelmaking group said Monday it signed a memorandum of understanding (MOU) with the automotive group to cooperate in the steel and rechargeable battery sectors.
Under the MOU, the two groups will jointly invest in the construction of an electric arc furnace-based integrated steel mill, set to be built in Louisiana by 2029. The facility is expected to begin operations the same year, supplying 2.7 million tons of steel plates annually to global carmakers.
They did not disclose how much POSCO will contribute to the $5.8 billion project.
Hyundai Motor Group Executive Chair Chung Euisun announced the plan to build the Louisiana steel mill during a meeting with Trump at the White House last month, as part of the group's $21 billion investment in the U.S. over the next four years. At the time, Hyundai Steel said it would seek external investors to fund nearly half of the project's cost.
POSCO, the steelmaking unit of POSCO Group, is considering marketing part of the forthcoming plant's output under its own brand. The company already supplies carmakers with products from its factory in Mexico.
The steelmaker said that POSCO Group's investment in Hyundai Steel's U.S. plant will help it overcome more than a decade of trade barriers in the North American market.
"Based on the synergy between the two companies, we will be able to find ways for sustainable growth across the group's steel and battery businesses in response to global trade pressures and paradigm shifts," POSCO Holdings President Lee Ju-tae said.
Hyundai Steel CEO Seo Gang-hyun, right, raises his hand as U.S. President Donald Trump speaks in the Roosevelt Room of the White House in Washington, March 24 (local time). From left are Trump, Louisiana Gov. Jeff Landry, Hyundai Motor Group Executive Chair Chung Euisun, Hyundai Motor Group Vice Chair Chang Jae-hoon, Hyundai Motor President Sung Kim and Seo. AFP-Yonhap
The two groups also agreed to deepen cooperation in the battery materials industry, as part of efforts to prepare for the rapid growth of the global electric vehicle (EV) market.
With POSCO Group's strength in producing lithium as well as cathode and anode materials, Hyundai Motor Group aims to cement its leadership in electrification by producing 3.2 million EVs by 2030.
POSCO Group has secured raw materials for lithium through overseas investments in salt lakes and mines. POSCO Future M, the group's battery materials unit, domestically produces cathode and anode materials.
The partnership is expected to help Hyundai Motor Group secure a stable supply of battery materials amid intensifying trade regulations in the U.S. and European Union.
"Through our partnership with POSCO Group, we aim to expand our business opportunities in global markets such as the U.S. while further solidifying the foundation for sustainable growth and leadership in future mobility and electrification," a Hyundai Motor Group official said.
Industry officials expect more longtime rivals in the steel and automotive sectors to follow suit, in response to Washington's steep tariffs.
SK and LG are believed to have recently resumed transactions in battery separators after a long rift caused by a patent dispute. Hyundai Motor has also continued to strengthen ties with General Motors since the two companies formed a strategic alliance last September.