Hyundai Steel goes aggressive in finding new demand

[Courtesy of Hyundai Steel Co.]

South Korea’s Hyundai Steel Co. is accelerating its efforts to develop steel products for electric vehicles (EVs) in a bid to secure profitability amid a downturn in the construction industry and increased competition from foreign low-cost steel products.

According to sources from the steel industry on Monday, Hyundai Steel plans to finalize developing steel plates for the next-generation 4680 cylindrical batteries, with dimensions of 46mm in diameter and 80mm in height, by the end of 2024.

Cylindrical batteries have emerged as the mainstream of secondary batteries since Tesla Inc. adopted the 4680 cylindrical battery in 2022, followed by BMW AG, Stellantis N.V., and others.

Korean battery companies are engaged in efforts to expand presence in the cylindrical battery market.

LG Energy Solution Ltd. plans to mass-produce 4680 cylindrical batteries at its Ochang plant in the second half of the year for supply to EV manufacturers such as Tesla.

Hyundai Steel is focusing on developing steel technology and supplying products for next-generation EVs such as the Hyundai G80EV. The company is currently developing reduction gears for EV reducers and 1.5 gigapascal (GPa) class high-strength hot stamping.

Hot stamping is a technology that improves the strength of steel sheets heated to a high temperature by placing them in a mold, pressing them, and then quenching them in the mold to improve their strength.

It allows for the production of lightweight but strong vehicle bodies, aiding in vehicle light weighting and extended driving range.

Hyundai Steel‘s focus on next-generation mobility steel is related to the prolonged poor performance of the steel industry.

The company recorded a consolidated operating profit of 55.8 billion won ($41.13 million) in the first quarter of 2024, down 83.3 percent from the same period a year ago. Its net profit also fell 86.2 percent to 32.2 billion won during the same period.

Sales of construction materials, which account for 30 percent of the company’s total revenue, have been declining each quarter due to the recession in the construction industry at home and abroad and the onslaught of low-cost steel products.

According to Hyundai Steel’s business report, the company‘s annual sales in the long steel segment fell 13.2 percent year-on-year to 8.93 trillion won in 2023.

Sales volume of long steel shrank by more than 10 percent year-on-year to 1.42 million tons in the first quarter of 2024.

Plate sales, on the other hand, increased to 2.91 million tons in the first quarter from 2.83 million tons in the fourth quarter of last year. Sales of automotive steel was up from 1.27 million tons to 1.3 million tons during the same period.

Hyundai Steel plans to focus on developing steel products for vehicles.

The company’s Chief Executive Officer Seo Gang-hyun said during its regular shareholders’ meeting in March that developing high-value-added steel materials and high-strength and lightweight car steel plates were key strategies to overcome the downturn in the industry and enhance profitability as the transition to EVs accelerates around the world.