* YUSCO would be first Asian firm to buy a EU stainless mill
* EU Commission grants Outokumpu extra time for sale
LONDON, Sept 19 (Reuters) - Taiwan's Yieh United Steel Corp (YUSCO) may join three other bidders for Outokumpu's Italian stainless steel plant, sources said, in a move that would boost its international presence.
The Acciai Speciali Terni (AST) plant, one of Europe's most modern, has become available after Finnish stainless steel producer Outokumpu offered to divest it to win competition authority approval for its purchase of Inoxum, the stainless steel arm of rival ThyssenKrupp.
Executives from YUSCO, one of Asia's largest stainless steel producers, flew to Italy to inspect the Terni mill last week, one of the sources said.
Should it beat the competition, YUSCO would be the first Asian producer to buy a major stainless steel plant in Europe.
"It makes sense for YUSCO to buy the plant because Italy is an important market for them and that way they can become more powerful internationally," an industry expert said.
"It would be the first time that an Asian company buys a main European stainless plant. It is significant step as it shows where the centre of power is shifting."
YUSCO was not immediately available to comment and Outokumpu declined to comment.
Outokumpu valued AST at over 500 million euros ($677.12 million) in its latest financial report, a spokesman said, but it is now expected to sell for less than that due to weakness in the global steel market.
The sale process has dragged on for almost a year as Outokumpu, disappointed with the low offers obtained in the spring, asked the European Commission for an extension to the initial six months period it was granted to sell the plant.
A consortium led by Luxembourg-based steelmaker Aperam , a company floated by ArcelorMittal in 2011, together with Italian steel companies Arvedi and Marcegaglia, was the only party to make a binding bid last spring and it remains interested in the plant.
The other two parties in the race are JPMorgan's private equity firm One Equity Partners and Apollo, another private equity company.
But latecomer YUSCO might have strategic interest in snapping up the Italian plant, which would make the Taiwanese company less dependent on its domestic market, which is suffering from oversupply and cheap imports.
"YUSCO is facing stronger competition from imports in its domestic market and that is squeezing margins," CRU senior analyst Mark Beveridge said.
"Like other Asian producers it is trying to expand its customer base internationally, into South East Asia and Europe as is seeks better margins."
The European Commission has recently granted Outokumpu another extension to complete the sale, until the first quarter 2014, according to a source with knowledge of the situation.
The Finnish company however said it hopes the divestment will be done by the end of 2013.
The Terni plant can produce up to 1.7 million tonnes of steel a year and posted sales of about 2.5 billion euros in the latest financial year.
YUSCO has a plant in southern Taiwan and also owns producer Lianzhong Stainless Steel Corporation (LISCO) in China. YUSCO and LISCO have combined output of about 2 million tonnes a year.