Korea's industries had mixed fortunes in 2025. Automobiles and petrochemicals struggled under the weight of high U.S. tariffs and the fallout from the Russia-Ukraine war, while sectors such as shipbuilding and defense enjoyed a boom as global demand rose. We examine key issues that will drive the global economy in 2026 and forecast their impact by industry. [Editor's note]
The docks (dock·shipbuilding facilities) at the HD Hyundai Heavy Industries shipyard across the Ulsan Mipo Bay and Jeonhaman areas had no empty slots even at year's end. As of the 25th of last month, 10 docks building large merchant ships were packed with vessels. The quays where final outfitting takes place after launching were also filled with ships awaiting departure.
An HD Hyundai Heavy Industries official said, "Based on our 14 total docks, around 30 vessels are under construction and operations are nonstop," adding, "About 40 ships are berthed at the quay undergoing outfitting and sea trials, and due to space shortages, we are proceeding by double-berthing two ships side by side."
In 2026, Korea's shipbuilders are expected to continue a selective order-taking strategy to "get full value," backed by a comfortable 3.5 years of secured backlog. According to the industry, delivery slots are fully booked through 2028, and as competition among shipowners intensifies for 2029 delivery slots (building space), prices are gradually rising.
Profitability is also set to improve in earnest. That is because orders received since 2023, when ship prices entered a clear upward trajectory, will be fully reflected in 2026 results. Han Seung-han, an analyst at SK Securities, said, "Prices for thick steel plate, a key raw material, have entered a stabilizing downtrend, reducing expense burdens," adding, "With productivity gains coinciding with deliveries of higher-priced orders, solid profit growth should continue."
◇ Even as export value pauses, volume up 8%… "High-margin merchant ships are the mainstay"
According to the recently released "2026 Economic and Industrial Outlook" by the Korea Institute for Industrial Economics & Trade (KIET) on the 3rd, export volume by Korea's shipbuilders in 2026 is expected to reach 10.46 million CGT (compensated gross tons), up 7.9% from 2025. As deliveries of merchant ships, the domestic industry's mainstay, increase, robust conditions are expected to continue.
However, it projected export value to decrease 4.0% year over year to $30.326 billion (about 43.9 trillion won). This reflects a change in ship types, not a drop in prices. Lee Eun-chang, a research fellow at the Korea Institute for Industrial Economics & Trade (KIET), said, "High-value offshore plant exports were concentrated in 2025, inflating the base, so the 2026 figure for export value comes down; in reality, as deliveries of core merchant ships such as liquefied natural gas (LNG) carriers ramp up, the actual volume of ships going overseas will increase."
The center of gravity in order portfolios is also shifting to high-value and specialty ships. According to the research division at NH Investment & Securities, in 2026 the share of new orders by ship type at major Korean shipbuilders including HD Hyundai Heavy Industries, Hanwha Ocean, Samsung Heavy Industries, and HD Hyundai Samho will be led by LNG carriers at 33%. Offshore plants (21%) and specialty vessels (18%) are expected to follow. This reflects a focus away from the generic container ship market, where China holds about 72% (Korea's share is about 22%), and toward high-value segments such as LNG carriers, where Korea has a commanding lead (about 66%).
◇ "High-value LNG carriers will climb again in 2026"… Ordering boom seen lifting prices
Expectations are especially high for LNG carriers, where Korea's shipbuilders have strengths. Jeong Yeon-seung, an analyst at NH Investment & Securities, said, "In 2025, LNG carrier orders were weaker than initially expected, but orders have picked up from the fourth quarter, and letters of intent (LOIs) to secure slots are being received in succession."
NH Investment & Securities projects that combined new orders by Korean shipbuilders in 2026 will rise 10% year over year to about $38.8 billion (about 56 trillion won). Jeong said, "The core orders for Korean shipbuilders in 2026 will be LNG carriers and tankers," adding, "Tanker prices are trending higher on the back of strong freight rates, and LNG carriers are also gaining pricing power as orders expand, so the ship new building price is expected to turn upward."
The securities industry expects LNG carrier ship new building price to exceed $260 million (about 370 billion won) within the next 6 to 12 months, up about 5% from the end of last year. Jeong said, "Of the 77 LNG carriers expected to be ordered globally in 2026, Korean shipbuilders are forecast to win 72," adding, "Of the 70 ships that Korean builders can deliver in 2029, 20 have already been taken, so competition among shipowners for remaining slots is likely to push prices higher."
◇ Green light for entry into U.S. defense… "2026 will be a year to lay the groundwork for cooperation"
Many also say 2026 will be a year for Korea's shipbuilders to lay the foundation for entry into the U.S. defense market. After U.S. President Donald Trump on the 19th of last month selected Huntington Ingalls Industries, Inc. (HII) as the prime contractor for the Navy's next-generation frigate program, the administration also unveiled plans to expand the record-sized surface combatant (BBG) fleet to 20–25 ships, raising expectations for spillover benefits to Korean shipbuilders.
Analyst Han Seung-han said, "If HII's shipyard proceeds with building the new frigate, production bottlenecks will be inevitable," adding, "Ultimately, to handle the volume, external cooperation will be essential for HII's shipyard." Accordingly, for follow-on ships after the lead vessel, cooperation is being discussed with Korean yards such as HD Hyundai Heavy Industries, which has a warship-building partnership with HII, and Hanwha Ocean, which has signed a Master Ship Repair Agreement (MSRA) with the U.S. Navy and secured a local yard.
That said, the prevailing view is that it will take years before defense cooperation with the United States yields visible results. Jeong said, "For direct cooperation with Korean shipyards to proceed, changes to U.S. laws are essential, and depending on shipyard conditions, capital expenditures for warship construction may be required," adding, "2026 should be seen as a year in which domestic shipbuilders, before starting U.S. warship construction, work to steadily raise the prospects for long-term cooperation with Korean yards."
Research fellow Lee Eun-chang also predicted, "2026 will be a period to lay the foundation for Korea-U.S. shipbuilding cooperation." He said, "For domestic shipbuilders such as Hanwha Ocean's Philly Shipyard to increase output in the United States, they will need to develop local talent, and even hiring will not be easy," adding, "From winning orders to designing and training personnel, next year will likely be a trial-and-error period marked by 'bumps and bruises.'"
Korean shipbuilders have drawn up blueprints to expand overseas footholds and build capacity to respond to the structural boom. The Korea Institute for Industrial Economics & Trade (KIET) projected that overseas production by Korea's shipbuilders will increase significantly in 2026, centered on Vietnam (up as much as 20%) and the United States (more than 20%).
Lee said, "With Korean shipbuilders' investments and entry into the United States, exports related to ships, including MRO, are expected," adding, "Next year, domestic shipbuilders will build around 11 million CGT, and in line with capacity, they will win about 11 million to 12 million CGT of orders, maintaining a 3.5-year backlog."