Russia’s invasion of Ukraine could hit bulker markets in the short term, but tonne-miles could rise over a longer period. This is according to Danish handysize specialist Lauritzen Bulkers’ chief executive Niels Josefsen. Speaking to TradeWinds hours before Russia began bombing Ukrainian cities, the boss said there had already been a slow-down in commodity markets. “As always when there’s a crisis everybody is holding back,” he said. “I’m not sure about shipping, but commodity trading — there is a wait and see [approach]”, he added. “Right now, there is less activity, but it’s not like we have seen an effect yet on spot markets,” the CEO continued.

Josefsen explained that in the short term, a crisis like Ukraine would usually have a negative effect. “And then a little bit longer term, it could be positive because trading patterns will change and normally that means more tonne-miles,” he said.

Speaking more generally about the outlook for bulker markets, the executive said he believes 2023 will see a positive trend due to emissions regulations. New rules on fuel efficiency will reduce ship supply because vessels will have to slow their speeds to comply. “There will actually be a possibility for a fairly good market to 2023 and going forward,” Josefsen said. “Each vessel will simply not be able to carry the same amount of cargo per year as they are doing right now,” he added.

Bulker rates have been rising this week, brokers and analysts have reported. “Uncertainty abounds, but this will likely impact the shipping markets as flows of crude oil, natural gas/LNG, coal and grains will all be disrupted, probably boosting tonne-mile demand depending on the degree of sanctions and trade dislocations,” Jefferies analyst Randy Giveans wrote in a note.