(Yicai) Sept. 15 -- China’s Zhongtai Cryogenic Technology will begin supplying raw rare gas materials to its joint venture with South Korean steel giant POSCO Holdings, with up to CNY50 million (USD7 million) of products to be delivered this year for use in the semiconductor industry.

A unit of Zhongtai will supply noble gases, including krypton, helium, xenon, and neon, to POSCO Zhongtai Airsolution (PZAS), a JV the two firms established in South Korea's Gwangyang a year ago, the Hangzhou-based cryogenic equipment developer said after markets closed the previous trading day.

PZAS further purifies noble gases for local semiconductor manufacturing clients. Since Zhongtai indirectly holds a 14.2 percent stake in the JV, making the latest deal a related-party transaction, according to the announcement.

Zhongtai and POSCO first unveiled their partnership plans at the end of 2023. In addition to raw gas supply, Zhongtai committed to providing purification equipment to the JV. The two parties signed a CNY175 million (USD24.6 million) equipment deal in October 2024 -- the first major step in the partnership -- with delivery set for November 2025.

Rare gases are typically recovered as by-products from oxygen plants serving steel mills. Zhongtai has established a rare gas subsidiary in Hebei province, a major steel-producing region in northern China. The subsidiary handles the acquisition and initial processing of the gases.

Despite the new supply deal, Zhongtai’s shares [SHE: 300435] slipped 0.9 percent today to close at CNY18.27 (USD2.60). The stock has gained more than 90 percent over the past 12 months and is trading near its highest level since March 2022.

Editor: Emmi Laine