Page last updated at 17:24 GMT, Friday, 7 November 2008

Corus to cut steel production 30%

Corus steelworks in Port Talbot
The slowing global economy has shrunk demand for steel

Europe's second-largest steel company Corus has announced plans for a 30% cut in production over the next six months due to weakening demand in Europe.

Three blast furnaces, at Port Talbot and Scunthorpe in Britain, and one in the Netherlands, will shut temporarily.

Corus, which is owned by India's Tata Steel, blamed the global economic downturn for the cuts.

Chief executive, Philippe Varin, said Corus had to adapt "to the changing environment with maximum speed".

Shut down

The cut is greater than expected. Last month, Corus said it would cut production between October and December by a million tonnes of crude steel - about 20% of its output.

In a statement the firm said it had now decided to extend these production cuts beyond December.

Corus said no jobs would be lost as a result of the production cutback. The firm, which employs more than 24,000 workers in the UK, announced 400 job losses in its distribution business, on 6 November.

Michael Leahy, general secretary of the steelworkers' union Community, said the shut down "underlines how the economic crisis is hurting manufacturing in Britain".

"We are hopeful that Corus will look to retain capacity to meet long-term demand rather than make a knee-jerk reaction to short-term trends," he said.

One blast furnace at Scunthorpe, Port Talbot, and IJmuiden in the Netherlands, will be temporarily shut down, the firm said.

Corus said it expected to produce about 30% less crude steel than planned during the two quarters to the end of March 2009.

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