(Reuters) - ArcelorMittal said on Thursday that it would build an advanced steel manufacturing facility in Calvert, Alabama, as it seeks to increase its production capacity to meet demand from the U.S. automotive sector.

The world's second largest steelmaker said the plant would be able to deliver up to 150 kilotons of premium non-grain-oriented electrical steel (NOES) annually, used primarily in the manufacturing of larger vehicles, full-size pickups and SUVs.

The company said demand for sophisticated NOES in the U.S. was growing while domestic supplies were limited, which should support a premium pricing outlook for NOES produced at the new plant.

The cost of building the plant is estimated at $0.9 billion, with an expected production start in the latter half of 2027, ArcelorMittal said.

New car sales in the U.S. rose to a five-year high in 2024, helped by hybrid models, according to Wards Intelligence.

Automakers are expecting the strong sales to continue into 2025, although President Donald Trump's proposed automotive policies, such as removing tax credits for electric vehicles, could present a wild card to the sector.