DEAR VALUED STAKEHOLDERS,
On behalf of the
Board of Directors,
I am pleased to
present the Annual
Report of Mycron Steel
Berhad and its group
of Companies (“the
Group” or “Mycron”)
for the financial
year ended 30 June
2025 (“FY2025”).
Despite facing intense
global and domestic
economic headwinds,
Mycron navigated
FY2025 with resilience.
OUR BUSINESS AND OPERATIONS
Additionally, the Group’s trading arm, Silver Victory Sdn Bhd (“SV”), supports the distribution of steel related products. Together, these entities anchor the Group’s position at the forefront of Malaysia’s steel industry, serving both domestic and international markets.
FINANCIAL YEAR OVERVIEW
For FY2025, the Group recorded revenue of RM722 million
compared to RM802 million in FY2024, with a pre-tax loss of
RM0.7 million, down from a pre-tax profit of RM20.7 million
the year before. This performance reflected compressed
margins driven by weaker steel prices, heightened import
competition, and increased financing costs.
For the first financial quarter, the Group recorded lower
revenue of RM198 million, compared to RM238 million
in the preceding quarter. Performance was adversely
affected by the steepest and most prolonged steel price
downtrend since the pandemic, with prices falling below
USD490/tonne in September 2024. Competitive pressures
intensified from both legal and illegal imports, particularly
from China. Sales volume in the CRC division was impacted
by a decline in exports, while the Steel Tube division faced
softer domestic demand. Continued margin pressure from
lower selling prices and higher financing costs resulted in
a pre-tax loss of RM2.6 million for the quarter.
In the second financial quarter, revenue edged up by
3% to RM204 million, supported once again by the CRC
division, which benefitted from steady export demand.
The Steel Tube division, however, was affected by weaker
domestic market conditions stemming from an influx of
low-priced imports that continued to suppress margins.
A net foreign exchange gain of RM1.3 million provided
some relief to overall performance, enabling the Group
to post a pre-tax profit of RM1.9 million for the quarter.
The third financial quarter was subdued, with revenue
declining by 26% to RM152 million as both the CRC
and Steel Tube divisions recorded lower sales volumes.
Shorter trading periods due to the two major festive
holidays (i.e., Chinese New Year and Hari Raya Aidilfitri)
further dampened sales activity, while CRC exports
sharply contracted and the Steel Tube division continued
to face heightened competition from low-priced Chinese
imports. Although steel prices stabilised during the
quarter, external conditions deteriorated following a
series of new U.S. trade measures, including expanded
tariffs under Section 232 and levies on Chinese
linked vessels and North American imports. These
developments disrupted regional trade flows, reducing
the Group’s export orders, margins, and deliveries to
the U.S. and related markets. Consequently, the Group
recorded a lower pre-tax profit of RM0.7 million for the
quarter.
The fourth financial quarter closed with revenue of
RM168 million, supported by higher sales volumes from
both the CRC and Steel Tube divisions. However, both
divisions continued to face margin compression due to
the diversion of low-priced Chinese exports into regional
markets and the impact of new U.S. tariff barriers.
Consequently, the Group recorded a pre-tax loss of
RM0.8 million for the quarter.
ECONOMIC LANDSCAPE
Global market conditions from July 2024 to June 2025 were highly volatile. Steel prices trended downward through the second half of 2024, reflecting subdued construction and manufacturing activity amid high interest rates.
China remained a decisive factor in global market dynamics.
The prolonged weakness in its real estate sector, which has
persisted for several years, continued to dampen domestic
demand despite government efforts to stimulate growth
through infrastructure spending, monetary easing, and
fiscal support. Housing prices remained under pressure,
consumer sentiment stayed weak, and construction activity
stalled. Confronted with stagnant local demand, Chinese mills
turned aggressively to exports. By the end of 2024, China’s
steel exports had surged to their highest levels since 2016,
surpassing 110 million tonnes for the year. The momentum
carried into early 2025, with monthly shipments exceeding 10
million tonnes in April, as exporters rushed to beat looming
tariff changes in the United States. This unprecedented wave
of exports pushed global and regional steel prices below
marginal cost levels, distorting trade flows and creating severe
price undercutting across Southeast Asia.
The prospects of higher tariffs, protectionist measures, and
escalating trade disputes intensified in 2024, driven by policy
shifts across major economies, none more polarising than
those introduced by the new U.S. administration. During the
first half of 2025, uncertainty surrounding U.S. tariff policy
created significant volatility across global trade and the steel
industry. On 10 February 2025, the United States reinstated
Section 232 tariffs at 25% on all steel imports, removing earlier
country-specific exemptions. Less than four months later, on 4
June 2025, the U.S. doubled these tariffs to 50%, with the UK
granted specific treatment.
Beyond product-based tariffs, the unpredictability surrounding
the scope and timing of U.S. reciprocal tariff measures against
its major trading partners further heightened market instability.
This environment of elevated policy uncertainty weighed heavily
on global steel demand, as businesses deferred investment
and procurement decisions amid a “wait-and-see” stance.
The compounded effect of these measures restricted access
to the U.S. market and redirected surplus steel exports toward
alternative destinations, particularly ASEAN. Malaysia, with
its relatively open trade environment, became a key landing
point for these diverted supplies, creating an uneven playing
field and exposing domestic producers to intensified and often
unfair competition from heavily discounted foreign steel.
In addition to these global and regional pressures, Malaysian producers also faced challenges in securing and maintaining export market access. Notably, in mid-2025, shipments to Mexico were disrupted following the removal of MCRC from the country’s Avisos Automáticos (Automatic Import Notice) system, constraining our ability to serve the Mexican market. It is unfortunate as this is a blatant contravention of the CPTPP Free Trade Agreement. MCRC has officially filed a complaint to the Ministry of Investment, Trade, and Industry (“MITI”) and MITI has escalated the matter to the Economic Ministry of Mexico. Mycron’s two operating subsidiaries are exposed to the effects of dumping and other unfair trade and pricing practices by foreign competitors. Furthermore, government subsidies to the steel industry remain widespread in certain countries, such as China. In periods of lower global demand for steel, there is an increased risk of additional volumes of unfairly traded steel exports into Malaysia. These imports often influence the pricing and demand of Mycron’s products. Domestically, the industry continued to grapple with steel smuggling and circumvention of duty exemptions. Steel smuggling has been brought to light through enforcement actions such as Ops Padu 1 and 2. The coordinated operations uncovered significant volumes of imported steel entering the country without valid Standard Compliance Certification
(PPS), as required by SIRIM and the Construction Industry Development Board (CIDB) for iron and metal products used in the construction sector. Several products, including finished and semi-finished steel items, were also found to have been imported illegally without appropriate import documentations. These findings confirmed longstanding concerns among domestic producers regarding substandard and irregular steel imports that distort market conditions and undermine fair competition. At the same time, large volumes of foreign steel entered the country under false declarations or by abusing exemptions originally intended to support genuine downstream industries such as automotive and high-end electrical and electronics (E&E). Such inflows have placed further strain on compliant local mills, which must now compete not only against low-priced legal imports but also against illicitly channelled steel that bypasses duties, quality standards, and safeguards. Together, these factors led to severe margin compression and intensified market pressures, forcing Malaysian producers such as Mycron to navigate an exceptionally volatile year. Against this backdrop of subdued economic conditions and weakened steel demand, the Group’s performance for FY2025 was inevitably affected.
DOMESTIC CRC INDUSTRY STRUCTURE
Hot Rolled Coil (“HRC”) steel sheets are the fundamental raw material used in producing Cold Rolled Coils (“CRC”) steel sheets.
In general, CRC manufacturers produce two types of CRC:
Overall Movement of Flat Steel in Malaysia by Calendar Year
The table above provides a comprehensive summary of the overall movement of flat steel in Malaysia for the calendar year 2024,
along with comparisons to 2023. In 2024, Malaysia consumed a total of 1.09 million tonnes of CRC sheets and strips, a 3.39%
decline from 2023. Of this consumption, 0.67 million tonnes (approximately 61%) were imported, while 0.52 million tonnes
(about 39%) were produced domestically.
Despite Malaysia’s existing production capabilities, imports still account for the majority of consumption and remain the primary
source of supply. This structural imbalance highlights the need to safeguard the domestic steel industry to ensure greater
self-sufficiency and resilience. The prevailing market dynamic continues to expose local producers to unfair competition from
lower-priced imports, particularly from China, which has eroded margins and weakened the competitiveness of domestic
manufacturers.
Mycron remains actively engaged with the Malaysian Government and relevant agencies to address dumped, subsidised, and
smuggled steel products. The Group continues to advocate for stronger trade remedies and more consistent enforcement to
restore fair competition and create a level playing field for domestic steel producers.
OUR COMMITMENT TO
GOVERNANCE
The Board of Directors recognises that corporate governance
principles are the foundation upon which stakeholder
confidence is built. We acknowledge the importance of
conducting business with integrity and in accordance with
widely accepted corporate governance standards.
Our board members and senior executives are committed
to upholding the highest standards of corporate governance
and business ethics across all operations of the Group. Our
governance model includes, among other elements, the Board
Charter, Terms of Reference for Board Committees, Anti-Fraud/
Anti-Corruption Policy, Fit and Proper Policy, Communication
Policy, Conflict of Interest Policy, and Corporate Disclosure
Policies and Procedures.
SUSTAINABILITY
Operating sustainably is integral to Mycron’s business strategy.
We are committed to embedding sustainability principles
across governance, environmental stewardship, social
responsibility, and economic performance. Our sustainability
agenda is championed by the Group Chief Executive Officer
with active oversight from senior management through
its Sustainability Oversight Committee, ensuring that
sustainability considerations are integrated into core decision
making and operational practices.
The Group’s sustainability objectives and targets are outlined in
our Sustainability Report, which is prepared in alignment with
globally recognised reporting standards, including the Global
Reporting Initiative (GRI), Bursa Malaysia’s Sustainability
Reporting Guide, General Requirements for Disclosure of
Sustainability-related Financial Information (IFRS S1), and
Climate-related Disclosures (IFRS S2).
In support of the nation’s long-term sustainability aspirations,
we have aligned our priorities with the Malaysian Government’s
key policy blueprints: the National Energy Transition Roadmap
(NETR), the New Industrial Master Plan 2030 (NIMP 2030),
and the Circular Economy (CE) Policy Framework.
Carbon Tax and CBAM Readiness
Looking ahead, we recognise the
growing importance of climate
related regulations, particularly the
Malaysian Government’s planned
introduction of a carbon tax in 2026
and the European Union’s Carbon
Border Adjustment Mechanism
(CBAM), which is expected to expand
its scope to include steel imports.
These measures will fundamentally reshape global
trade dynamics and competitiveness within the steel
industry.
The introduction of carbon tax is a progressive step
toward Malaysia’s decarbonisation agenda. While we
fully support the nation’s sustainability aspirations,
it is crucial that these policies take into account
the unique challenges faced by the iron and steel
industry to ensure a balanced approach between
environmental objectives, economic goals, and
industry competitiveness.
At a time when manufacturers are already grappling
with manufacturing cost increases, Mycron calls
for the establishment of clear and transparent
regulatory mechanisms and a phased, soft-landing
implementation of carbon pricing to allow businesses
time to financially recover and transition. The Group
remains committed to advancing decarbonisation
economically. The challenges are undeniable, yet there
is also great opportunity. Because, simply put, there
can be no net-zero future without steel.
Our overarching goal is to ensure that Mycron not
only complies with evolving regulatory requirements
but also positions itself competitively in a future where
carbon intensity becomes a defining criterion for global
market access.
PROSPECTS AND OUTLOOK
The iron and steel industry is the foundation and pillar of the national economy, crucial for stable economic and industrial growth. While in many ways our industry has never been more complex and is confronting significant headwinds on the global, regional, and domestic levels, it is without a doubt that our future will be driven by steel, and this represents a great prospect for Mycron.
As we move into the new financial year, the outlook for the steel industry remains highly challenging. Global market conditions continue to be shaped by persistent oversupply. Following the U.S. decision in June 2025 to double its Section 232 tariffs to 50%, surplus Chinese steel has been increasingly diverted into Southeast Asia, with Malaysia emerging as a key export destination. The situation reaffirms China’s enduring influence on global steel markets, as the outlook continues to depend on its demand dynamics, which have long shaped the industry through significant shifts in net steel exports.
Looking ahead, China’s trajectory will
hinge on three key factors: the pace
and scale of its real estate recovery, the
impact of heightened U.S. tariffs, and
the extent of government-led stimulus.
Persistent overcapacity and elevated
export levels are expected to weigh
heavily across industries. With much of
China’s infrastructure spending already
front-loaded, domestic demand is
expected to soften in the medium term.
If this slowdown is not offset by renewed
capacity reductions, Chinese exports
are likely to remain at current elevated
levels, prolonging downward pressure
on the global market.
Within Malaysia, industry players face a
dual challenge: unfairly priced legitimate
imports and the continuing inflow of
smuggled or mis-declared products
that circumvent duties and distort fair
competition.
The Ministry of Investment, Trade
and Industry (MITI) launched the
Steel Industry Roadmap 2035 in
September 2025, setting out a long
term framework to reform the industry
through phased strategies to reset
capacity, tighten licensing, strengthen
enforcement against illegal operators,
and accelerate the transition to low
carbon steelmaking. While the ambition
of the roadmap is commendable,
its benefits will not be immediate or
guaranteed. Effective implementation,
regulatory clarity, funding availability,
and consistent enforcement will be
critical to its success. For Mycron, the
roadmap represents a potentially stable
and supportive environment, but one
whose impact on the industry will be
proven over time.
In the near term, the combination of global oversupply, subdued
domestic demand, and persistent inflows of low-priced
imports, is expected to weigh on profitability. Nevertheless, we
remain confident in our ability to navigate these headwinds by
enhancing operational efficiency, expanding export markets,
and working closely with regulators and industry associations
to strengthen trade remedies and enforcement, to ensure a
level playing field for Malaysian companies.
While we acknowledge that market conditions are tough and
we will have challenges to navigate in FY26, looking further
ahead there are several reasons for optimism. The global
transition toward sustainability is reshaping the competitive
landscape. International measures such as the European
Union’s Carbon Border Adjustment Mechanism (CBAM) and
Malaysia’s forthcoming carbon tax in 2026 are set to make
decarbonisation a decisive factor for market access and long
term business sustainability.
Mycron is preparing for this shift by further embedding
sustainable practices across our operations. We continue
to support the transition to a low-carbon economy through
targeted investments in renewable energy, energy efficiency
and process optimisation aimed at reducing our carbon
footprint. This transition is being approached in a measured
and pragmatic manner that enables us to reduce our carbon
emissions while we await policy certainty and low-cost clean
energy to support an accelerated transition.
Over the medium to long term, the sustainability transition,
reinforced by frameworks such as the Steel Industry Roadmap
2035, New Industrial Master Plan 2030 (NIMP 2030), and
the National Energy Transition Roadmap (NETR), provides a
pathway for Malaysia’s steel sector to reposition itself within
a more competitive and environmentally conscious global
marketplace. These frameworks can support an improvement
in demand and competitiveness of steel manufacturing in
Malaysia.
For Mycron, our goal remains clear: to preserve resilience
in the short term while laying the foundation to become
Malaysia’s leading producer of low-carbon emission CRC and
Steel Tubes in the years ahead. Our strategy is equally clear:
we will continue to strengthen the quality and capability of
our business by maintaining disciplined execution, driving
operational excellence, and delivering consistent results.
DIVIDEND
In view of the Group’s financial position, the Board of Directors
does not recommend the payment of any dividend for the
financial year ended 30 June 2025.
ACKNOWLEDGMENT AND APPRECIATION
On behalf of the Board, I extend my sincere appreciation
to our management team and staff for their dedication and
contributions. To our business associates, customers, and
shareholders, thank you for your continued trust and support.
Together, we will navigate the challenges ahead and work
toward a sustainable future.
Tunku Dato' Yaacob Khyra
Executive Chairman