Japan’s second biggest steelmaker JFE Holdings Inc forecast a full year profit of JPY 180 billion (USD 1.76 billion), lagging expectations amid a chronic oversupply of steel in China.

Earnings in the quarter ended June 30 saw operating profit rise 25 percent to JPY 31.4 billion from JPY 25.1 billion a year earlier, as the company pared costs and increased sales, which rose 11 percent to JPY 927.6 billion. Net income fell 33 percent to JPY 15.5 billion after the company booked a one-time impairment charge at its trading unit.

In a first quarter earnings statement posted to the Tokyo Stock Exchange, the company said “Overseas markets remain unfavorable, citing the Chinese supply glut. Japan’s economy continued to see a moderate recovery in the quarter.”