Folha de S Paulo quoted Mr Marco Antonio Castello Branco CEO of Usinas Siderurgicas de Minas Gerais SA as saying that it plans to cut its 2009 spending plan by as much as 40% to respond to a slowdown in demand for flat steel by automakers.

Usinas initially planned to invest BRR 7 billion in 2009. It said that it will decide on any headcount reduction after first quarter results are released.

It also changed its construction plans for a mill in Santana do Paraiso. It will cut by half the initial output capacity of the mill, which was designed to produce 5 million tonnes of steel products by 2011.