Report: Asian steelmakers studying US investments

A combination of geopolitical factors reportedly has caused South Korea-based conglomerate Hyundai to set up a committee to study investing in steelmaking capacity in the United States.

A March 11 report by the Korea Economic Daily points to U.S.-imposed tariff barriers and the potential for a carbon border adjustment mechanism (CBAM) as reasons why Asia-based manufacturers with operations in North America could soon want to make steel there.

Writer Woo-Sub Kim of the newspaper

The report says Hyundai, South Korea’s second-largest steelmaker, has made a once temporary green steel committee a permanent unit in its organization. Its central task, according to the report, is to examine the pros and cons of building an electric arc furnace (EAF) mill in the U.S.

Late last year, Japan-based Nippon Steel Corp. announced its intention to acquire U.S. Steel Corp. Although that Pittsburgh-based company operates some of America’s few remaining blast furnace/basic oxygen furnace (BOF) mills, it also owns growing scrap-fed EAF capacity at the Big River Steel complex in Arkansas.

Hyundai, Nippon Steel and other overseas producers have watched some tariffs imposed by the Trump administration remain in place during the Biden years. They now also face the prospect of Donald Trump being reelected and introducing additional tariffs.

The also notes that Trump could direct most of his tariff attention toward China, however, that nation currently ships little steel to the U.S., unless it is doing so via third parties.

A second Biden term does not necessarily mean good news for Asian steel exports to the U.S. either. His administration has been more focused than a Trump White House is likely to be on enforcing CBAM or a similar measure.

The Economic Daily says the U.S. government “has decided to levy a tax of $55 per ton of greenhouse gas emissions on 12 imported product items, including steel, starting this year.” Details of that system are not yet in place, however.

Such emissions-focused measures typically favor recycled-content EAF technology, which can have an 80 percent smaller carbon footprint than blast furnace/BOF production, according to the report.

Both Hyundai and Posco Steel, South Korea’s largest producer, in addition to considering EAFs are studying a method that mixes molten iron from a blast furnace with melted steel scrap to be used in electric furnaces, the report says.