Finnish stainless steel maker Outokumpu said Tuesday it would cut production by about 10 per cent in the second quarter after reporting its first-quarter operating profit rising to euro 424 million – an all-time record.

Net profit in the three-month period through March surged to euro307 million (US$416 million) from euro56 million a year earlier. Revenue increased 50 percent to euro 2.13 billion (US$2.9 billion) from euro1.4 billion in 2006.

The world's second-largest stainless steel maker Outokumpu said in a statement underlying demand for stainless steel continued to be strong.

"In standard volume products, however, distributors are decreasing their inventories and are hesitant in placing new orders. This has resulted in lower orderbooks at Outokumpu's mills that produce volume products," it added.

"Due to shortened orderbook Outokumpu has decided to cut production by some 10 per cent in the second quarter."