Tata's Corus to 'adjust' steel production

By Humeyra Pamuk

LONDON (Reuters) - Europe's second largest steelmaker, Corus, said on Monday demand had slowed and it was taking steps to adjust its steel production accordingly.

"There's clearly been a slowdown in steel demand, which we have noticed in the United Kingdom, in export markets and in Southern Europe," a Corus spokesman said. "We are taking steps to adjust our production to tie in with the new demand realities and to maintain a low level of stocks."

The company, owned by India's Tata Steel (TISC.BO: Quote, Profile, Research), now produces more than 20 million tonnes of crude steel a year.

A collapse in steel prices, producers and traders de-stocking instead of buying new material and a gloomy demand outlook have helped force steelmakers across Europe to cut production.

Corus's statement follows an announcement by the world's top steelmaker, ArcelorMittal (ISPA.AS: Quote, Profile, Research), of a 15 percent cutback in production in an attempt to maintain prices.

But it contrasted with a statement by the World Steel Association (WSA), previously known as the International Iron and Steel Institute (IISI), that it was confident that both 2008 and 2009 would be years of demand growth in steel.

"We are in a period of high economic uncertainty," said Ku-Taek Lee, Chairman of the World Steel Association and Chairman and CEO of POSCO (005490.KS: Quote, Profile, Research).

"However, we continue to expect growth in steel demand in 2009 and for the medium term, above the world GDP growth rate," he said, speaking at an annual industry gathering in Washington.