POSCO Holdings Inc. has agreed to invest in Hyundai Steel Co.’s planned 8.5 trillion won ($6 billion) Louisiana plant, marking the first overseas collaboration between South Korea’s largest steelmakers as they navigate new U.S. trade barriers.
The companies signed a memorandum of understanding Monday that could see POSCO invest “in the trillion-won range” in the Donaldsonville facility, though final terms are still being negotiated. The partnership aims to circumvent the 25% tariffs on imported steel announced by the Trump administration in March.
“Our two companies will be able to navigate global trade pressures,” said POSCO Holdings President Lee Jutae at the signing ceremony.
The alliance represents a significant shift for the longtime rivals. Two decades ago, POSCO cut steel supplies to Hyundai when the automaker entered steelmaking. Now, facing Chinese competition and stringent emissions requirements, they’re joining forces.
Hyundai Motor Group plans to fund roughly half the project through equity investments from Hyundai Steel, affiliates, and outside investors, with the remainder coming from debt financing. Industry sources indicate ArcelorMittal may also join as an investor.
Beyond steel production, the agreement includes collaboration on battery materials research and development, with POSCO supplying components for Hyundai’s electric vehicles.
