POSCO, the world’s seventh-largest steelmaker, is in discussions to invest in Hyundai Steel Co.'s upcoming US-based plant—its first overseas production facility. The move is aimed at establishing a local manufacturing presence to sidestep the steep 25% tariffs imposed by the US on imported steel. If successful, this would be the first overseas co-investment and production effort between Korea’s two largest steel producers.

According to KED Global, POSCO Holdings Inc., the parent company of POSCO, is negotiating with Hyundai Motor Group—Hyundai Steel's parent—regarding a stake in the planned Louisiana plant, scheduled to commence operations in 2029. Hyundai earlier announced an investment of 8.5 trillion won (approximately $5.9 billion) into this project. Half of this capital is expected to come from equity contributions by Hyundai Motor affiliates and outside investors, while the remaining amount will be raised through debt.

While details such as the investment method and POSCO’s exact contribution are still being discussed, industry insiders suggest the companies are inching closer to an agreement. KED Global reports also indicate that their collaboration could extend beyond production to include joint research and development in advanced steelmaking technologies.

This potential alliance comes as both companies face mounting pressure from US trade policies and increasing global competition, particularly from low-cost Chinese steel producers. Their fierce rivalry dates back to 2004 when Hyundai Steel entered the blast furnace business—long dominated by POSCO. However, escalating tariffs and trade restrictions are prompting them to consider strategic cooperation in overseas markets.

For POSCO, which has long contemplated entering the US market, this joint venture offers a cost-effective alternative to building a plant from scratch. The company previously shelved plans to establish a plant in Alabama due to high labor costs and later abandoned talks to co-invest in an American steelmaker.

For Hyundai Steel, bringing POSCO on board would reduce its financial load and grant access to POSCO’s technical expertise and capital reserves—valuable assets in an increasingly competitive market.

Nonetheless, some challenges remain. POSCO is reportedly requesting exclusive rights to operate a few production lines within the new plant to manufacture its own products, a proposal Hyundai Steel is hesitant to accept. Additionally, around ten other global steelmakers—including ArcelorMittal—have shown interest in investing in the project, which could complicate POSCO’s participation.

Despite these hurdles, industry watchers believe a deal is likely, driven by both companies’ shared goal of navigating trade barriers and securing a strong foothold in the US market.