By Kwanwoo Jun

Posco Holdings' shares climbed after the steelmaker unveiled a joint venture project to produce rare gases for making semiconductors in South Korea.

Posco rose as much as 7.3% to 508,000 won ($391.85) in early trade Wednesday, outperforming the benchmark Kospi's 0.1% fall.

The stock's rally, which snapped a three-session losing streak, came after Posco and China's Zhongtai Cryogenic Technology agreed to jointly build a plant to produce high-purity neon, krypton and xenon gases.

The JV would produce 130,000 normal cubic meters of rare gases annually, about 52% of South Korean chip makers' total needs, according to Posco.

Posco and Zhongtai plan to break ground in 2024 to build the JV plant in the South Korean southern port of Gwangyang and start production in late 2025.

Posco said its Chinese partner would hold a 24.9% stake in the JV, while it would hold the remaining 75.1% stake. Posco didn't disclose financial terms.

The JV would "contribute to stabilizing the supply chain by domestically producing high-purity rare gases for semiconductors, which have been mostly imported," Posco said in a statement.

The global supply chain has been disrupted by the ongoing war between Ukraine and Russia, which are main suppliers of high-purity rare gases.

Write to Kwanwoo Jun at

(END) Dow Jones Newswires

12-26-23 2250ET