Employees of OneSteel have been warned to brace for tougher days ahead as the company reduces costs.

OneSteel Managing Director Geoff Plummer disclosed at the company's yearly meeting on Monday that on top of the 770 steel jobs the company shed in 2011, another 310 would be cut by the end of March in its attempt to achieve a yearly savings of $65 million.

He also hinted that the company could close more plants unless economic conditions in the steel industry improve. The move could affect some of OneSteel's 11,000 workers.

Reports said that the firm is considering closing its Whyalla plant which employs 4,000 workers. Although South Australian Industry Minister Tom Koutsantonis assured OneSteel of the operation's long-term viability, Mr Plummer acknowledged the operation of Whyalla is part of the comprehensive review process for the company.

OneSteel registered a $185-million loss in 2010, while competitor BlueScope Steel logged a $1-billion full-year loss in August and laid off 1,000 workers.

OneSteel Chairman Peter Smedly admitted there were no signs of improvement ahead for the steel sector due to increased international economic uncertainty which was affecting business confidence.

"In the short term, increased activity is expected from the resources sector and government-funded civil work projects, but the balance of the construction sector is expected to remain generally weak over the balance of the financial year," Mr Plummer was quoted by The Herald Sun.

Following the warning by Mr Plummer, OneSteel shares dipped 3.6 per cent to 93 cents, its lowest level in 10 years.

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