TOKYO -- Japan's largest steelmaker Nippon Steel on Tuesday lifted its net profit forecast for the second time this year to a record 520 billion yen ($4.5 billion), a significant turnaround from a net loss of 32.4 billion yen it reported in the last fiscal year.

The steelmaker now expects revenue to rise 39% to 6.7 trillion yen for the year ending in March. The company had previously forecast a 35% rise in revenue to 6.5 trillion yen and a net profit of 370 billion yen.

"The steel demand continues recovering as the world recovers from the pandemic," said Takahiro Mori, representative director and executive vice president of Nippon Steel.

Mori sees limited impact on the company's earnings from a fall in auto production caused by a global chip shortage, as the steelmaker is seeing brisk demand from other customers.

Market conditions have improved thanks to strong demand for steel products in the manufacturing and construction industries, pushing up prices and margins.

Due to a steel production cut in China, the world's biggest producer, the company expects global supply of the metal to continue to be tight. Mori said that the impact of production cuts will outweigh expected weaker demand in China amid trouble in the local property market.

In the first six months, Nippon Steel reported revenue of 3.16 trillion yen and a net profit of 312 billion yen, helped in large part by a rise in product prices.

Nikkei reported in August that price negotiations between Nippon Steel and its customer Toyota Motor resulted in a significant increase.

This prompted Toyota to raise the price of the steel materials it onsells to its suppliers in the second half of fiscal 2021 by about 20,000 yen per ton, its largest price hike in over a decade.

While the prices of raw materials such as coking coal is rising, the company is in talks with its customers to "strengthen efforts to ensure appropriate margins" by further hiking product prices in the second half of the year, the company said.

The steelmaker filed a lawsuit in October against Toyota and Baoshan Iron & Steel, a subsidiary of China's state-run China Baowu Steel Group, for infringing its patents in nonoriented electrical steel sheets, which is used in electric vehicle motors.

Mori declined to comment on the matter. "Toyota is one of our most important customers and we hope that we maintain a good relationship with the company," Mori said.

The steelmaker is seeking 20 billion yen ($176 million) from each company.