ThyssenKrupp AG will cut costs by more than 1 billion euros this fiscal year as a weakening of demand from carmakers and builders leads to a "significant" drop in sales.

"We will take a significant decline in sales, the size of which can't be judged; this will have a corresponding effect on profit," Ekkehard Schulz, chairman of Germany's largest steelmaker, said. "The economic slump at carmakers, machine builders and construction companies will also leave its traces at ThyssenKrupp."

Steel prices rose to a record in September before plunging this quarter as world economic growth slowed. In response, ThyssenKrupp is closing plants and reducing work shifts, while larger rival ArcelorMittal is slashing output more than 30 percent. Schulz said a stoppage at its stainless-steel plants will be extended until mid-January as demand weakens.