It is reported that E United Group, Taiwan's leading stainless steel maker, will join hands with a major mining group in Indonesia for investing TWD 10 billion in nickel mining and a nickel iron alloy plant. Both parties have signed a letter of intent for cooperation for the project, which is expected to be settled within 2012.

Yieh United Steel Corporation, a subsidiary of E United Group, is Taiwan's largest stainless steel plant, with annual capacity of 1 million metric tonnes. Lianzhong Stainless Steel Material Co Limited Guangdong is a 100% owned subsidiary of Yieh United, boasting annual capacity of 200 tonnes. The combined capacity of 3 million tonnes is the third largest in Asia and accounts for 10% of the global stainless steel output of 33 million tonnes. E United Group racks up annual sales of TWD 150 billion for stainless steel alone.

Nickel, a high priced non ferrous metal, is major material of stainless steel and its price fluctuation greatly affects the prices of stainless steel. In recent years, E United Group has been actively extending its reach to the upstream sector, as evidenced by the investment of TWD 9.6 billion in building a nickel iron alloy plant in Ningde of Fujian Province. The direct investment in nickel mining will enable the group to secure supply of raw material and strengthen the competitiveness of its stainless steel in the world market.

A manager of E United Group pointed out that output of the projected nickel mining operation in Indonesia will be supplied to the nickel iron alloy plant in Fujian directly. Ranking officials of E United Group are talking with the Indonesia counterpart for details of the project. Market insiders note that nickel accounts for 8% of stainless steel in weight but 50% in cost.

Source - CENS

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