Slower economic growth in China has hit the country’s biggest steel mills where profits slumped 98% an industry group said.

Profits at China’s large steel mills slumped 98% last year as slower economic growth hit steel demand in the world’s largest consumer the China Iron & Steel Association said

In a statement the industry association said last year profits reported by its members which include more than 70 large steel mills fell to CNY 1.6 billion. The largest firms account for about 80% of the total steel output in China which is also the world’s largest steel producer.

A few large Chinese steelmakers suffered big losses last year as slower demand growth and a rapid decline in steel prices hurt their business.

Angang Steel the listed unit of China’s second largest steelmaker, Anshan Iron & Steel Group posted a loss of CNY 4.16 billion last year after losing CNY 2.15 billion in 2011.

Maanshan Iron & Steel, the listed unit of Magang Group reported a preliminary loss of CNY 3.7 billion to 4 billion last year.

Baoshan Iron & Steel China’s largest listed steelmaker said that earlier this month that its last year net profit likely rose by about 40% to CNY 10.3 billion helped by asset sales. However it said that operating profit before 1 off items was likely to show a decline of 33% to CNY 6.2 billion.

CISA expects an improved outlook for the country’s steel sector this year although that will be tempered by an oversupply of built-up inventory high raw materials costs and a likely slow pickup in consumption.

The industry body previously said it expected Chinese steel demand to rise by 3.1% this year, 0.6% point higher than last year as the economy recovers.