Mycron Steel Berhad | A pioneer in Cold Rolled Coils (CRC) and Steel Pipes

Chairman's Message


Mycron Steel Berhad encompasses the combined operations of two main subsidiaries, namely Mycron Steel CRC Sdn Bhd ("MCRC") and Melewar Steel Tube Sdn Bhd ("MST")

A smaller subsidiary, Silver Victory Sdn Bhd ("SV"), is involved in the trading of steel related products.


For the financial year ended 30 June 2023, the Group generated revenue of RM540 million (FY2022: RM746 million) and a pre-tax loss of RM13.8 million (FY2022: pre-tax profit RM64.5 million).

With weaker steel demand and downward pressure on global steel prices, the Group's performance was flat in the first quarter of FY2023 with a revenue of RM120 million. Chronic manpower shortages and disrupted supply chains had a substantial impact on steel consumption, leading to a steep decline in output across major steel consuming industries during this time. The Russian-Ukrainian conflict continued to severely impact the global economy and led to significantly high energy costs. The global economy and steel demand were vulnerable to the negative effects of rising energy prices and excessive inflation. Steel prices fell more rapidly than raw material costs, resulting in a narrowing of the profit margin and a contraction of the spread.

Weak domestic steel demand, increased dumping of CRC Steel imports into Malaysia, and persistent downward pressure on global steel prices contributed to the Group's negative performance in the second quarter, with a revenue of RM134 million and pre-tax loss of RM16.4 million. After nine consecutive profitable quarters, this is the first quarter to end in a deficit.

Uncertainty surrounding the 15th General Elections also had a chilling effect on consumer confidence. Steel demand and consumption were low across major steel-consuming industries due to labour shortages and a generally sluggish global economy. As a result, the steel industry saw severe customer destocking in the second half of calendar year 2022.

The Group's decline in revenue to RM127 million in the third quarter was attributed to lower unit selling price corresponding to lower market steel prices for both the CRC and Steel Tube divisions. Lower price-spreads (from higher carrying inventory value) and higher unit production cost (from lower throughput volume) caused the Group to record a marginal pre-tax profit of RM0.15 million for the quarter.

The Group's revenue for the fourth financial quarter of RM159 million was around 26% higher than the preceding quarter mainly due to higher sales volume for both the CRC and Steel Tube divisions. Both divisions contributed to stronger gross profit performance for the quarter. However, the performance for the quarter narrowed to a pre-tax loss of RM0.45 million after incurring an impairment charge on property, plant, and equipment of RM6.8 million.


Historically, the steel industry has been very cyclical and sensitive to economic conditions, consumptions trends, as well as global steel production capacities, and fluctuations in international steel trade and tariffs.

The lingering effects of the pandemic, the Russian invasion of Ukraine, and the sharp tightening of monetary policy to contain high inflation and economic downturn in China, have all harmed the Global Economy. All these shockwaves, weighed on the Group’s performance, during the financial year.

Steel prices in 2022 were highly volatile, spiking at the end of March following the Russian invasion of Ukraine and then decreasing in the second half, as a result of the Chinese government’s repeated lockdowns due to its “Zero Covid” policy, and a weak Chinese real estate sector. The dramatic drop in underlying real demand, along with a smaller reduction in steel production, pushed for greater steel exports to foreign markets, driving down global steel prices. Because of the earlier than expected re-opening of China’s economy, the country’s growth accelerated to 4.5% during the first quarter of 2023 fuelled by the transportation, retail, and hospitality industries. However, the reopening resurgence was stymied by a continuing collapse in the Chinese real estate market during the second quarter of 2023, underscoring the need for further policy support, from the Chinese Government.

Steel prices are vulnerable to global economic swings, which are influenced by a variety of factors ranging from trade and geopolitical tensions to global/regional monetary policies. Steel prices fall because of excess supply relative to demand for steel. Steel stocking and destocking cycles, which have been widespread over the last 18 months, have also had an impact on apparent demand and consumption. Steel price decreases, on the other hand, are hastened when customers adopt a “wait-and-see” approach and destock in anticipation of further price increases.

Steel stockists and distributors, for example, may accumulate (stock) considerable steel inventories during periods of low prices and then sell (destock) as prices improve, thereby disrupting steel price increases. As a result, steel prices fluctuate substantially, and have come under pressure during recent periods.


Domestic Flat Steel Consumption by Calendar Year – 5 years

(Source: Malaysia Iron and Steel Industry Federation, MISIF)

In 2022, Malaysia’s overall flat steel consumption decreased to 5.0 million tonnes from 5.4 million tonnes in 2021, a decrease of 6.8%. When compared to Malaysia’s steel consumption in 2016 (6.67 million tonnes), this represents a 25% drop in consumption.

Flat steel, specifically CRC steel demand, is sensitive to trends in cyclical industries (such as automotive, construction, white goods, and machinery) that have seen contractions in 2022, due to raging inflation, the Russia-Ukraine war, and hard Chinese Zero-Covid Policy lockdowns.


The Board of Directors of the Group recognises that corporate governance principles are the foundation upon which stakeholder confidence is built. In addition, we acknowledge the importance of conducting business with integrity and in accordance with generally accepted corporate governance principles. Our board members and senior executives will continue to focus on upholding the highest standards of corporate governance and business ethics, in the operations of the Group. The Governance model for the Group includes, among others, the Board Charter, Terms of Reference of Board Committees, Anti-Fraud/ Anti-Corruption Policy, Fit and Proper Policy, Communication Policy, Conflict of Interest Policy, and Corporate Disclosure Policies and Procedures.


We value the importance of operating sustainably, and we are putting forth our best effort to attain sustainability objectives and targets in conformity with global reporting standards. The Group's sustainability agenda is driven by our Chief Executive Officer and supported by senior executives. We endeavour to incorporate sustainable practices into our operations in the areas of Governance, Climate Change, the Environment, our People, and the Community. Since the commencement of our sustainability journey, we have achieved some notable milestones, which are further elaborated in the appended Sustainability Report.

National Energy Transition Roadmap

The Malaysian Government released a detailed National Energy Transition Roadmap (NETR), outlining the measures the government plans to take to achieve its net-zero emissions target by 2050. Our country is demonstrating its commitment to this target and the domestic steel industry is fully supportive of the government's roadmap.


FY2023 was a challenging year for Mycron. In view of the Group’s financial position, the Board of Directors do not recommend the payment of any dividend for the financial year ended 30 June 2023.


The future poses huge risks to the global economy and obstacles for us to overcome. Several factors make it difficult to predict future steel demand and prices, which include the ongoing conflict in Ukraine, the possibility of a U.S. recession in 2024 due to the delayed impact of tighter credit conditions and high interest rates on consumer demand, as well as steel demand dynamics in China.

The global steel sector is highly sensitive to the trend of China's steel exports. Net Chinese flat steel exports increased from 3.8 million tonnes per month in January and February 2023, to 5.7 million tonnes per month in April and May 2023. There is no sign that this trend will abate anytime soon, due to the current weakness of China’s domestic steel demand.

As far as the Group is concerned, steel consumption in China will continue to decline. There will be an adverse effect on global steel prices, and an increase in Chinese steel exports, if the decline in demand, does not correspond with renewed steel capacity reduction. While interest rate cuts will likely benefit China’s construction industry, the Group does not anticipate a growth in China’s domestic steel demand, unless the Chinese government announces further policy support.

On the domestic front, the formation of a new unity government in Malaysia paves the way for the continuation and progression, of multiple development plans, one being the New Industrial Master Plan.


On behalf of the Board, I would like to express my heartfelt appreciation to the management team and staff for their commitment, dedication, and contributions to Mycron. To our valued business associates, customers, and shareholders; thank you for your continued invaluable support, confidence, and trust, that you have placed in us.

Tunku Dato' Yaacob Khyra

Executive Chairman