India’s Tata Steel has written down the value of its European steel assets for the second time in as many years, adding to its already long list of woes and highlighting the struggles facing steelmakers.

In a notice to the Bombay Stock Exchange late on Thursday, the steel division of the Tata conglomerate added a $785m charge to the $1.6bn writedown it took in 2013.

This time Tata said the non-cash impairment was taken on the back of “supply imbalance facing the global steel industry, significant volatility in iron ore and coal prices in the past 12 months and the current view of long term forecast of steel and its raw material prices.”

A supply glut in China, which is being exported as the Chinese economy slows, has hamstrung the industry even as demand has started to recover elsewhere.

However, Tata also suffers from its own problems. Its European business, which it acquired following the $13.1bn purchase of Anglo-Dutch steelmaker Corus in 2007, has long been a thorn in the side of Cyrus Mistry, group chairman.

Since entering the European market, the steelmaker has been forced to slash costs and axe jobs as it struggled to perform amid slumping demand.

This latest headache is mostly concentrated in the group’s troubled UK division — where the company has over the past few years been axing jobs. The number of people it employs in the UK has fallen from 25,000 in 2008 to 17,500 in March this year.

The latest writedown could heighten speculation that Tata will sell off its European long products division, which makes steel that is used for building and to make rails for train lines.

Tata had been in talks with Geneva-based industrial group Klesch, but a potential sale has been hampered by the threat of industrial action after Tata in March revealed plans to close the historic British Steel final-salary pension scheme.

The pension deficit was thought to be roughly £2bn as of March 31 2014. Tata estimated the closure of the final salary pension scheme would result in savings of £1bn.

“It is hard to quantify the future loss that Tata seeks to avoid by this step, though it is possible that it needs to plug the existing hole,” said Credit Suisse’s India equity team in a note to clients.

“Without this clarity, even the Klesch group may not be able to complete its purchase of EU long products business. A strike (for now unlikely) could dent profitability meaningfully.”

Balloting for industrial action is expected to conclude near the end of May. Tata will announce its fourth-quarter results on May 20.

Shares in Tata Steel, India’s largest private steel company, fell 1.5 per cent in early Mumbai trading on Friday to R360.95.