(Yicai Global) March 3 -- Shares in a number of Chinese ports and shipping companies surged by the exchange-imposed limit today as the Russia-Ukraine conflict looks set to divert trade from the region to more far-flung areas, driving up the cost of ocean freight.

The share price of the ports of Lianyungang, Jinzhou and Yantian all jumped by 10 percent today to CNY4.83 (USD0.76), CNY4.63 and CNY6.08 respectively. The Ningbo Marine International Shipping Agency [SHA:600798] also surged 10 percent to CNY5.58 and Shenghang Shipping [SHE:001205] was up 4.66 percent to CNY29.

The unrest in Russia and Ukraine, both major exporters of grain and coal, is likely to cause Chinese importers to turn to more distant countries such as the US and Australia for supplies, and as a result of the longer distance travelled transport costs will rise, China Merchants Securities said in a recent report.

The regional conflict will probably increase demand for ocean freight, lead to the shutdown of ports in some regions, block some shipping routes, stimulate Europe to stockpile basic necessities and intensify the shortage of container transport in the global supply chain, the report said.

The global supply chain of ocean container transport is tight and has no resistance to any adverse incident, China Securities said in its latest research report. Shipping companies are likely to adjust their trade routes in response to risks posed by local unrest.

Europe has a high dependency on Russia for its energy supplies. If the situation worsens and sanctions are imposed, European oil refineries will turn to the Middle East for their crude oil needs. Russia will then look for other buyers for its crude oil, leading to longer haulage distances and a hike in transport costs.

Editor: Kim Taylor