Hyundai says it will make steel in the US

The board chair of South Korean conglomerate Hyundai appeared with President Donald Trump at the White House to announce a $21 billion investment package in the U.S. that will include the construction of a new steel mill.

According to Bloomberg, Hyundai board Chair Chung Euisun characterized the mill investment as a move that would strengthen its steel supply chain in the U.S.

Earlier statements from Hyundai and its Hyundai Motor Co. business unit have referred to any such mill as using electric arc furnace (EAF) technology, a configuration that often involves using significant amounts of recycled steel as feedstock.

In the most recent announcement, made side by side with Trump and Louisiana Gov. Jeff Landry, Hyundai indicates it also intends to purchase $3 billion of U.S. liquefied natural gas (LNG).

In the steelmaking sector, natural gas frequently is used to produce direct-reduced iron (DRI), a ferrous scrap additive or alternative. How Hyundai goes about producing steel in the U.S. will be of concern to metals recyclers and environmental advocacy groups.

Scrap alternatives such as DRI and hot-briquetted iron (HBI) long have played a role in the domestic and global EAF market. In some cases, mills use DRI and HBI to improve the chemistry of semifinished and finished steel products.

In terms of acting as a large-volume substitute for scrap, DRI and HBI have found their most cost-effective markets in places with scrap generation deficits in combination with nearby abundant natural gas reservoirs, such as the Middle East and Iran.

EAF mill operator Nucor Corp., Charlotte, North Carolina, is among the U.S. companies that have investments in DRI production. That firm’s financial results during the nearly two-decade period it has produced DRI sometimes credits the material as cost-effective but in other financial periods points to narrow margins.

On the environmental advocacy front, Washington-based nongovernmental organization Mighty Earth last month released a report titled, “Tainted Steel: The Deadly Consequences of Hyundai’s Dirty Steel Supply Chain,” presenting its viewpoint on the company’s practices as a steel producer.

That report cites the use of coal in the blast furnace/basic oxygen furnace (BF/BOF) process as its foremost complaint.

“Despite its glossy image of sustainability through EV promotion, Hyundai has yet to shift away from coal steel, allowing harmful practices in its supply chain to persist,” Mighty Earth says.

"Research shows that Hyundai Steel continues to source steel manufactured with Russian coal, which likely ends up in cars sold in the U.S. and European Union. One of Hyundai’s suppliers, Formosa, also imported over $450 million worth of Russian coal between 2022 and 2024, contributing to record coal use and emissions in Vietnam. These shipments come from mines connected to JSC Stroiservis, a company sanctioned by the U.S. in response to Russia’s invasion of Ukraine.”

Should Hyundai build an EAF mill fed by recycled steel and DRI made with natural gas energy, that could assist the conglomerate in reducing its dependence on coal in the steelmaking process.

The investment announcement has been welcomed in the White House, by Louisiana’s government and almost certainly will be by advocates of reshoring, many of whom view tariffs as an incentive for such investments.

The Bloomberg report refers to the recent opening of a Hyundai electric vehicle (EV) plant near Savannah, Georgia, and to earlier comments from Hyundai Motor Co. President and CEO Jose Muñoz regarding “a strategy of localization in the U.S. to mitigate the risk of policy changes.”

In an early 2025 letter to investors from Muñoz, he says of that facility, “The decision to make this investment was made during the first Trump administration. We’re having dialogue with the new U.S. administration to reinforce our significant investments, job creation and economic impact.”

Should Hyundai follow through on its plans to build an EAF mill in the U.S., it could provide welcome news to metals recyclers, reshoring advocates and possibly regarding the company’s carbon footprint.