Hyundai Steel reveals the American factory plan, and SKID participates

Written by Hyungo Jin and Jehon Lee

The company said in a regulatory file on Tuesday that Seoul (Reuters) -will invest Hyundai Steel from South Korea $ 5.8 billion, along with the Hyundai Motor Group to build a steel factory in the US state of Louisiana, with a capacity of 2.7 million tons.

Hyundai Steel shares initially jumped over 5 % on the news, but reflected the early gains to finish 7 %, as US President Donald Trump praised the company’s plan.

The new Hyundai Steel Factory is part of the Hyundai Motor Group plan to invest $ 21 billion in the United States, which was announced by the President of South Korea with Trump at the White House on Monday.

This step is seen as an effort by Hyundai to protect himself from American definitions of steel and cars, but it is not clear whether this will help secure exemptions for Hyundai and South Korea.

Trump threatened to impose a mutual tariff on many countries on April 2, which may target South Korea, which has a major trade surplus with the United States.

Hyundai Motor and Affiliate Kia Corp shares, which are expected to make steel from the proposed plant. Hyundai Motor shares ended 3.3 % after 7.5 % to their highest levels since October 2024. KIA closed by 2.1 %.

However, analysts have expressed their concerns about how to finance Hyundai Steel, which owns billions of dollars, by building the factory. They said that there are risks of implementation related to the new technology of using electric furnaces to produce car steel.

“It is not clear whether the investment will benefit Hyundai Steel in the future,” said Lee Tae Huan, an analyst at Dishin Securities.

Hyundai Steel said it will cover half of the costs, with the rest of its mother company and other investors.

The company said that the factory, which will make steel vehicles, will be built from 2026 to 2029.

Hyundai Steel is a subsidiary of Hyundai Motor and Kia Motors that have factories in the United States.

(Participated in the reports of Hyunjoo Jin, Jihoon Lee and Hyunsu Yim; edited by Himani Sarkar)