South Korea’s Hyundai Motor Group and POSCO Group said on April 21 they have signed a partnership to cooperate in steelmaking and battery materials, expanding their alliance as trade risks grow under U.S. President Donald Trump’s administration.
Hyundai, the country’s third-largest business group by assets, and POSCO, its fifth, are strengthening ties as Washington ramps up tariff threats, industry sources said.
Under the agreement, POSCO will invest in Hyundai’s planned electric arc furnace steel mill in the United States. Hyundai previously announced a $5.8 billion project to build the plant in Louisiana, with an annual capacity of 2.7 million tonnes, and said roughly half of the investment would come from external sources. POSCO will now participate as a co-investor, though details such as its stake and financial commitment were not disclosed.
The companies said investment terms remain under discussion, with options including POSCO directly marketing a portion of the steel produced at the site. POSCO said the deal would help it secure a foothold in the North American steel market, which has faced protectionist trade barriers for more than a decade.
Beyond steel, the groups plan to cooperate in electric vehicle battery materials, aiming to diversify and stabilize supply chains for key secondary battery components while exploring long-term opportunities in next-generation materials.
POSCO said it would leverage its competitiveness in battery materials — from lithium to cathodes and anodes — alongside Hyundai’s clean mobility technologies to build a sustainable partnership.
The deal marks a shift in relations between the two industrial heavyweights, who have often been rivals since Hyundai entered the steel business more than 20 years ago. At one point, tensions escalated to the extent that POSCO reportedly refused to supply automotive steel sheets to Hyundai.
But mounting trade pressure from Washington has pushed the former competitors to realign as partners. “Though the two firms remain fierce rivals in the market, they have shown a willingness to set aside differences for practical benefits,” an industry official said.
POSCO said the partnership reflects ongoing discussions since Chairman Chang In-hwa took office last year. “By combining our strengths, we can find sustainable growth solutions in steel and battery materials as global trade challenges and industrial shifts accelerate,” said Lee Ju-tae, POSCO Holdings President, at the signing ceremony in Seoul.
