Tata Steel (TISC.NS), the world's No. 7 steelmaker, may cut production further in Europe in the next few months if steel orders weaken, Karl-Ulrich Köhler, CEO of Tata Steel in Europe said on Wednesday.

The company had already cut production capacity from 85-90 percent in the first half this year to 80-85 percent currently, it said.

"We don't exactly know where this is going to go in the next couple of months," Köhler said during a press briefing, talking about the fragile economic situation in Europe.

"If it's a temporary thing we will find temporary solutions. We are not producing to stock, we are reducing stocks, that's part of our efficiency programme and if the order book is not supporting production we can certainly reduce further."

In September, Tata Steel's European unit, shut down one of its four blast furnaces in Scunthorpe, United Kingdom. Another blast furnace at the site was idled a few years ago on a long-term basis, while the two remaining furnaces are currently operating.

"It is clear, the summer has been difficult; now, from October we will see how the end of the year develops," Köhler said. "The next difficult month will certainly be December. How early do people stop their activity this year? That is one of the questions."

Tata Steel is planning to invest $8 billion (5 billion pounds) in India, also to expand operations, and 2 billion pounds in Europe over the next few years.

"In Europe we will invest clearly above depreciation level and we'll do that for the next four to five years," Köhler said.

Tata Steel Europe is the second-largest steel producer in Europe with an annual capacity of 18 million tonnes.