(Yicai Global) Nov. 28 -- Dowstone Technology’s stock price climbed after the Chinese non-metallic materials producer said it will supply CNY5.9 billion (USD824 million) worth of lithium battery materials to South Korea's Posco Chemical, an amount equivalent to 90 percent of its revenue last year.

After surging by as much as 9.6 percent before the lunch break, Dowstone [SHE: 300409] finished the day 6 percent up at CNY16.30 (USD2.26) a share.

Posco Chemical will buy precursor materials for ternary lithium batteries from Dowstone from 2023 to 2025 through two of its subsidiaries, the Enping, Guangdong province-based company said late on Nov. 25.

The deal is equivalent to about 90 percent of the firm’s audited business revenue last year, it said, and will increase the market share and corresponding gross margin ratio of Dowstone's lithium battery materials and improve its client structure.

Dowstone did not specify the supply amount and product specifications, but it noted that actual prices would be based on the market price and US dollar exchange rate at the time of purchase.

The pair joined hands on lithium battery precursor materials in 2019, Dowstone noted, with the amount of business transacted between the two reaching CNY167 million (USD23.2 million).

Posco Chemical, owned by South Korea's biggest steel mill Pohang Iron and Steel, is a major supplier of cathode materials for lithium cells to clients including South Korea's big-three power battery makers LG Chemical, Samsung SDI, and SK Innovation.

Dowstone Technology, whose primary business was initially ceramic materials, tapped into the new energy vehicle battery materials sector through an acquisition in 2018.

Editor: Futura Costaglione