Earlier, Hyundai Steel disclosed on the 16th that it will invest $1.46 billion (about 2.15 trillion won) in a U.S. electric arc furnace steel mill specialized in automotive steel sheets. Aside from the equity stake, the other details are the same as those disclosed in March.

The total investment is about $5.8 billion, half funded with equity and the other half with external borrowing. Hyundai Steel will shoulder about $1.46 billion, which is half of the required equity (about $2.9 billion).

Lee Jae-gwang, an analyst at NH Investment & Securities, said, “Hyundai Motor and Kia, affiliates of the group and major demand sources, will each invest $440 million to secure 15% equity, bringing Hyundai Motor Group’s total equity stake to 80%,” adding, “At the group level, the goal is to procure automotive steel sheets needed for key North American models locally in a stable manner, free from tariff burdens.”

The analyst said, “This U.S. electric arc furnace steel mill construction project is assessed not as a simple capacity expansion, but as a medium- to long-term strategy to respond to the United States’ protectionist steel trade policy and the trend of strengthened carbon regulations,” adding, “By producing the high value-added product of automotive steel sheets locally, it will be able to reduce tariff and logistics cost burdens.”

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