Slowing global demand has compelled Tata Steel to cut steel production at its Corus unit in the UK and the Netherlands.

Corus has decided to reduce its crude steel production over the next three months by up to 20 per cent or around 1 million metric tonnes, "to mitigate the effects of the softening near-term steel demand outlook."

The decision is aimed at aligning steel production with demand, which is now affected by the consequences of the global financial crisis.

''We are taking appropriate steps to optimise our operations and protect our sound financial position over the next few months,'' said Philippe Varin, Corus CEO.

The price of steel, along with the price of other raw materials such as oil and metals, has been falling in the past three months on fears that a global slowdown will lead to lower demand.

These fears have intensified in recent weeks as the impact of the financial crisis on the wider economy becomes clearer.

Corus, Europe's second-largest steel producer, said no change in production from current levels is planned for the operations of Tata Steel Group outside Europe.