Japan’s JFE Holdings, the world’s sixth-largest steelmaker, reported an 83% fall in recurring profit for the year ended 31 March, hit by sluggish demand and huge inventory write-offs.

The company did not give a profit forecast for the current financial year, reflecting an uncertain outlook for raw materials costs as it continues to negotiate with suppliers.

JFE said recurring profit, or profit before tax and one-offs, came to JPY69.3bn ($743M) for the past financial year, down from JPY400bn ($4.3bn) the year before.

It said steel production for the year declined to 28.35Mt with demand decreasing both domestically and overseas in the first half of the year, although there was some upward momentum in the second half.

Net sales in its steel section fell to JPY2.2bn (23.6M) as sales volumes and prices contracted. Ordinary income declined to JPY32.3bn ($346.1M) despite lower raw-material prices and efforts to improve earnings.

Measures taken to protect itself from the recession included the idling of two blast furnaces.

It predicted a brighter future, saying it had already capitalised on rising demand in emerging Asia nations, focusing on exports of high grade steel to these markets.

In its forecast for the forthcoming year it said the rising demand for steel in China had greatly tightened the availability of raw materials, prompting raw materials suppliers to push for changes in the pricing systems for iron ore and coking coal.

The company is negotiating such changes and related revisions of steel prices. In view of this, the company had decided not to issue earnings forecasts at this time.

It did warn that domestic demand is not expected to recover soon so would concentrate on business in Asia, which the company said was key to growth.