Corus to cut steel production

The firm, the second largest steel producer in Europe, announced last month it would reduce production between October and December by a million tonnes of crude steel, around 20% of its output, to align production levels with demand.

Corus said on Friday it had now decided to extend production cuts beyond December and expects to produce about 30% less crude steel than planned during the two quarters to the end of next March.

Blast furnaces at Scunthorpe and Port Talbot, as well as one in Holland, will be temporarily shut down.

Corus chief executive Philippe Varin said: "The current slowdown requires us to adapt our operations to the changing environment with maximum speed. We are adopting proactive and responsible measures in the areas of production and costs to optimise our results. Meanwhile, our strategy for long-term growth remains unchanged."

Corus, a subsidiary of Indian firm Tata, said no jobs will 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 on Thursday in its distribution business.

Michael Leahy, general secretary of the steelworkers' union Community, said: "We understand that there will be no permanent capacity cuts. However, we will be having discussions with Corus nationally and locally as to how we might mitigate any damage that may be caused by the shortfall in the order book.

"Community will work to ensure a long-term future for both permanent and contract employees. This revision underlines how the economic crisis is hurting manufacturing in Britain. Community will continue to work nationally for support from the Government.

"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."

Corus has four blast furnaces at Scunthorpe, although one was already idle, and two at Port Talbot as well as one at Teesside, which is not affected by the announcement.