Hyundai Steel targets $4B in annual sales at Louisiana steel mill, eyes premium auto-sheet by 2030

Hyundai Steel has set a target of roughly $4 billion in annual sales at the Hyundai Steel-Posco Louisiana Steel joint venture, known as HPLS, which is under construction in Donaldsonville, Louisiana. The company plans to begin commercial production of relatively easier-to-form exterior auto-sheet panels when the mill starts up in early 2029, then expand into premium exterior panels between 2030 and 2031.

Kim Taek-jun, executive vice president and head of Hyundai Steel's North America steel business strategy division, told South Korean reporters at a briefing Thursday (local time) in Donaldsonville that selling the full 2.7 million-ton product mix the mill is designed for would generate an estimated $4 billion in annual sales. "The operating profit margin will be subject to significant volatility depending on market conditions, but we expect it to be in line with other electric arc furnace steelmakers," he said.

HPLS is a fully integrated electric arc furnace steelmaking complex dedicated to automotive steel sheet, with a total investment of $5.8 billion. Annual production capacity stands at 2.7 million tons — 1.8 million tons of automotive steel sheet and 900,000 tons of general steel sheet — with commercial production targeted for the first quarter of 2029. Hyundai Steel holds a 50 percent stake, with Hyundai Motor and Kia each holding 15 percent and Posco holding 20 percent.

Hyundai Steel has already secured buyers for a substantial portion of output from the outset. HPLS CEO Kim Hyung-jin said supply agreements are in place to deliver 400,000 tons each to Hyundai Motor's and Kia's US plants, for a combined 800,000 tons. "Posco also has a sales plan for 600,000 tons," he added. He said the remaining automotive steel sheet volume "should be fully sellable through existing marketing networks and export channels."

At HPLS, iron ore in pellet form will be reduced using natural gas to produce direct reduced iron, which is then fed into electric arc furnaces. When combined with carbon capture and storage technology and renewable energy, the process can cut carbon emissions by roughly 70 percent compared with conventional blast furnace steelmaking.

On the strategy for selling to global automakers beyond Hyundai Motor and Kia, Kim said the mill's strongest selling point is steel sheet with 70 percent lower carbon emissions than conventional automotive steel. "Sustainability will become an increasingly important goal for steelmakers and automakers alike, and we believe that aspect will resonate strongly," he said.

He added that it was too early to confirm whether specific negotiations with other automakers were underway.

Hyundai Steel also expressed confidence in the quality of automotive steel sheet to be produced at HPLS. The key lies in blending direct reduced iron with high-grade scrap before feeding the mixture into electric arc furnaces. Kim said laboratory tests using a 75 percent DRI and 25 percent scrap mix confirmed that the resulting automotive steel sheet performs comparably to blast furnace output. "We plan to use DRI at a 75 percent ratio," he said.

Exterior panels — the most technically demanding category of automotive steel sheet — will be developed in stages. Kim said the mill should be capable of producing lower-grade exterior panels with simpler forming requirements when it starts up in early 2029, with development of premium exterior panels using the same 75 percent DRI and 25 percent scrap ratio targeted for 2030 to 2031.

HPLS is set to begin main construction in the fourth quarter of this year, followed by structural and mechanical installation in the third quarter of 2027, commissioning in the fourth quarter of 2028, and commercial production in the first quarter of 2029.