Hyundai to source steel and battery materials from Posco
The new memorandum of understanding between Hyundai and Posco should “strengthen diversification of supply chains for lithium and battery anode materials, ensuring sourcing security for core battery resources”. For its part, Posco aims to establish itself as an “industry-leading supplier of automotive steel and key battery materials”.
Posco is a steel company based in Pohang that is also heavily involved in the businesses of battery precursors and motor cores. This includes the production of lithium hydroxide and active cathode and anode materials for electric vehicles.
As part of the agreement, Posco is investing in Hyundai Motor Group’s EAF steel mill project in Louisiana, USA. Hyundai’s steel mill EAF stands for “electric arc furnace,” describing the plant’s core technology. The US steel plant is expected to open in 2029.
Posco Holdings President Lee Joo-tae said, “By leveraging the synergy between the two companies, we can find sustainable growth solutions across our entire business portfolio, including steel and secondary battery materials, amid global trade pressure and shifting industry paradigms.”
The South Korean steelmaker has a plant in Mexico but has not yet been active in the US market. Posco said it expects the US location to allow it to efficiently supply materials within the United States and Mexico, giving the firm the choice of flexible production and sales.
The new Hyundai steel production site in Louisiana that Posco is now investing in will have an annual production capacity of 2.7 million tons and will supply steel sheets to Hyundai’s main production sites in the USA. This includes two plants in Georgia, the newly inaugurated Hyundai Motor Group Metaplant America (HMGMA) and Kia Corporation’s Autoland plant, as well as the Hyundai plant in Alabama.
Posco Group has said it is reorganising its business around steel, energy materials, and new businesses under ‘2 Core + New Engine.’ This strategy focuses on “strengthening its fundamental competitiveness to build a long-term growth structure”.
Posco is building a portfolio of steel materials for electric vehicles, which includes its ‘GIGA Steel’ for automotive steel plates. The Posco portfolio also includes battery packs and electric vehicle motor materials. This comes with a secondary battery materials value chain equipped with cathode and anode material production and recycling capabilities based on the company’s global lithium salt lakes and mines.
Posco and Hyundai already have several existing cooperations on motor cores.
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