According to Mining News Pro -Transshipment refers to diverting cargoes to different ports before shipping to the final destination, often in order to dodge tariff.
These comments from MITI came amid a tit-for-tat tariff war between the world`s two largest economies that have raised the risk of cheaper items being dumped across the globe. Dumping occurs when a company charges more in its home market than in the export market for the same product.
Malaysian Iron and Steel Industry Federation (MISIF) president Datuk Lim Hong Thye said that the trade war is a double-edged sword for Malaysia. On one hand, there are concerns over dumping and on the other hand, there is fear of Malaysia being hit with anti-dumping laws if it is used as a transshipment hub.
Recently, U.S. has imposed duties on some USD 250 billion worth of Chinese goods, while China has retaliated with USD 60 billion in import tariffs. To beat the tariffs, some Chinese manufacturers have resorted to rerouting to low-cost Southeast Asian countries such as Vietnam before shipping the goods to the U.S according to the market reports.
Malaysia already has some trade restrictions in place. In February, it had imposed anti-dumping duties on cold-rolled stainless steel imports from four countries including China, Taiwan, South Korea, and Thailand for five years until Feb. 7, 2023. Also in 2015, it had imposed anti-dumping duty on HRC imports from two countries China and Indonesia till 2020. Still there are "distortions" in the distribution of steel products, Lim Hong Thye said.
MITI is monitoring trade statistics very closely, as it does not want Malaysia to be used as a hub for trade circumvention and has also called upon Malaysian steel manufacturers to diversify production and supply specialty steel to local industries such as automotive and oil and gas, as mega infrastructure projects are being put on hold.
In 2017, Malaysia imported 7.6 MnT of steel with the highest imports coming from China (24%) followed by Japan (22%) and Taiwan (12%). The country’s flat products imports were highest at 4.1 MnT followed by long products at 2 MnT, and pipes & tubes at 722 tonnes.
During Jan-Jul’18 Malaysia’s iron and steel products imports (in terms of value) surged by 14% y-o-y basis from RM 15,992 million (USD 3,866) to RM 18,156 million (USD 4,389 million).