* Net loss after minority interests at 22.09 bln rupees
* Seeing weak signs of recovery, to rationalise Europe ops
* Analysts say not seeing signs of demand recovery in Europe
* Shares extend losses after results, close down 5 percent
(Adds detail, comments from shareholders' meeting)
By Prashant Mehra
MUMBAI, Aug 27 (Reuters) - Tata Steel, the world's No. 8 steelmaker by output, fell to a surprise net loss in the June quarter on a slowdown in demand in Europe and the United States and warned of a slow global recovery.
The Indian company, whose shares ended 5 percent lower, said it was aiming to rationalise operations in Europe and sharpen its focus on cost management.
Analysts said a rebound in earnings would be difficult in the absence of a revival in demand.
"There is still no enthusiastic sign of demand coming back in Europe and that remains a worry," said Niraj Shah, a sector analyst at Centrum Stock Broking in Mumbai. "The numbers are really disappointing."
Shares in Tata Steel, with a market value of $6.9 billion, ended down 5.1 percent at 436.40 rupees, having extending losses to as much as 7.3 percent in the last half hour of trade after the results. The Mumbai market overall closed up 0.1 percent.
Tata Steel said its consolidated April-June net loss after minority interests and share of profits of associates was 22.09 billion rupees ($452 million), compared with a forecast of 660 million from a Reuters poll of six analysts and a profit of 39.01 billion a year earlier.
Consolidated net sales fell to 231.81 billion rupees from 433.75 billion, against a forecast of 230 billion.
Global steel production slumped by a fifth in the first seven months of this year as demand from the building and automotive sectors shrank, but is gradually picking up as steel mills revive idled capacity.
LIQUIDITY MANAGEMENT
The world's top two steelmakers, ArcelorMittal and Nippon Steel Corp, last month posted quarterly losses and warned the industry's return to growth from the economic slump would be gradual.
Chairman Ratan Tata said the loss at Tata Steel, which bought Corus, Europe's second-largest steelmaker, in 2007, reflected a continued squeeze in demand in the United States and Europe.
"There are now weak signs of recovery in terms of iron ore prices but it is still difficult to say if this is sustained recovery or just a plateau," Tata told the annual shareholders' meeting.
"We aim to make Tata Steel the lowest-cost producer and rationalising operations in Europe and optimising their effectiveness will be a major challenge," he said.
The World Steel Association in April forecast steel demand would tumble 15 percent this year, its steepest fall since World War Two.
Tata Steel, which last month raised $500 million through a share sale on the London Stock Exchange, has said it has strong liquidity and no material repayment obligations or refinancing for the next 12 months.
The funds are being partly used to finance its capacity expansion in India, where it is betting on annual demand growth of about 25 percent.
"The global recovery is expected to be slow and the company will continue to focus on operating performance and liquidity management," B. Muthuraman, managing director of Tata Steel, said in a statement.
Tata Steel stock has more than doubled so far in 2009 after tumbling 77 percent last year. The broader index is up nearly 64 percent so far this year. (Writing by Sumeet Chatterjee; Editing by Tony Munroe and David Holmes) ($1=48.9 rupees)