Corus to Reduce Crude Steel Output on Slowing Demand

By Thomas Kutty Abraham

Oct. 16 (Bloomberg) -- Corus, the U.K. unit of India's Tata Steel Ltd., will reduce production by as much as 20 percent over the next three months as demand weakens.

Output will be lowered by 1 million metric tons, Tata said today in a statement. Europe's second-biggest steelmaker produces about 20 million tons annually.

``The decision is aimed at aligning steel production with demand, which is now affected by the consequences of the global financial crisis,'' Tata said. ``No change in production from current levels is planned for the operations'' outside Europe.

Slowing demand from manufacturers and builders is driving down steel prices and forcing producers including ArcelorMittal, the biggest, to consider output cuts. Global steel production and consumption may slump 5 percent next year, Research & Consulting Group AG, a steel-industry consultant, said Oct 9.

``We're taking appropriate steps to optimize our operations and protect our sound financial position over the next few months,'' Chief executive Philippe Varin said in the statement.

Japan's biggest steelmakers, including Nippon Steel Corp., may cut production and accept lower prices in the year starting April 1, 2009, UBS AG said in a report dated today.

To contact the reporter on this story: Thomas Kutty Abraham in Mumbai at tabraham4@bloomberg.net