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Corus Cuts Production by 20%, Signs 5-Year Supply Contract with Vale
10/20/2008 - Tata Steel Group’s Corus subsidiary will reduce its crude steel production by up to 20% over the next three months in an attempt to mitigate the effects of the softening near-term demand outlook.
Tata Steel Group’s Corus subsidiary has announced it will reduce its crude steel production over the next three months by up to 20% in an attempt to mitigate the effects of the softening near-term demand outlook.
The cutback, which amounts to about one million tonnes, is aimed at aligning steel production with demand, which has been negatively impacted by the global financial crisis.
“We are taking appropriate steps to optimize our operations and protect our sound financial position over the next few months,” said Philippe Varin, Corus CEO. The company said that no change in production levels had been planned for Tata Steel Group outside Europe.
Corus also announced that it had signed a new long-term iron ore supply contract with Companhia Vale do Rio Doce (Vale). Under the new contract, Vale will supply Corus’ plants in Europe with almost 63 million tonnes of iron ore over five years. The contract will come into effect in 2009.
“We are pleased to have reached this important agreement with Vale, which strengthens the relationship Corus and Vale have built up over the last 65 years,” commented Varin. “This contract complements the raw materials strategy for Tata Steel Group’s European operations of combining external sources with future captive supplies.”
