In 2025, Korea's industrial sectors diverged in fortunes. Automobiles and petrochemicals struggled under the impact of high U.S. tariffs and the Russia-Ukraine war, while sectors such as shipbuilding and defense enjoyed a boom as global demand rose. We examine the 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 HD Hyundai Heavy Industries' shipyards across Ulsan's Mipo Bay and Jeonha Bay had no empty slots even at year-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 launch were also full of ships awaiting departure.
An HD Hyundai Heavy Industries official said, "Based on all 14 docks, about 30 ships are under construction and operations are nonstop," adding, "About 40 ships are moored at the quays for outfitting and sea trials, and due to a lack of space we are proceeding with double berthing by placing two ships side by side."
In 2026, Korea's shipbuilding industry is expected to continue a selective order strategy that "gets fair prices," backed by a healthy 3.5 years of secured backlog. According to the industry, deliveries are already fully booked through 2028, and as competition among shipowners intensifies for 2029 delivery slots (building space), prices are gradually rising.
Profitability is also expected to improve in earnest. This is because orders placed since 2023, when ship prices entered a firm upward trajectory, will be fully reflected in 2026 results. Han Seung-han, an SK Securities analyst, said, "Prices of thick steel plate, a key raw material, have entered a stabilizing downward phase, reducing the expense burden," and predicted, "Solid profit growth will continue as productivity gains coincide with deliveries of higher-priced orders."
◇ Even as export value catches its breath, volume up 8%… "High-margin merchant ships are the driver"
According to the recently released 2026 economic and industry outlook by the Korea Institute for Industrial Economics & Trade (KIET) on the 3rd, export volume for Korea's shipbuilding industry in 2026 is expected to be 10.46 million CGT (compensated gross tonnage), up 7.9% from 2025. With deliveries of merchant ships—the industry's mainstay—rising, favorable conditions are set to continue.
However, export value is projected to fall 4.0% year over year to $30.326 billion (about 43.9 trillion won). This reflects a shift in ship types, not price declines. Lee Eun-chang, a research fellow at the Korea Institute for Industrial Economics & Trade (KIET), said, "In 2025, there was a concentration of high-priced offshore plant exports, creating a base effect that lowers the 2026 export value figure; in reality, as deliveries of core merchant ships such as liquefied natural gas (LNG) carriers ramp up, the actual volume of ships heading overseas will increase."
The center of gravity in order portfolios is also shifting to high value-added and special-purpose ships. According to NH Investment & Securities' research division, in 2026 the share of new orders by ship type at major Korean builders—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 special-purpose ships (18%) are expected to follow. This reflects a strategy of avoiding the general-purpose container ship market, where China dominates with about 72% (Korea's share is about 22%), and focusing on high value-added segments such as LNG carriers, where Korea holds a commanding lead (about 66%).
◇ "High value-added LNG carriers to rebound in 2026"… Ordering boom expected to lift prices
Expectations are high especially for the LNG carrier market, where Korea's shipbuilders are strong. Jung Yeon-seung, an analyst at NH Investment & Securities, said, "In 2025, LNG carrier orders were weaker than initially expected, but orders have been active since the fourth quarter, and letters of intent (LOIs) to secure slots are being received one after another."
NH Investment & Securities expects combined new orders by Korean shipbuilders in 2026 to reach about $38.8 billion (about 56 trillion won), up 10% from the previous year. Jung said, "The core orders for Korean shipbuilders in 2026 are LNG carriers and tankers," adding, "Tanker prices are on the rise on the back of high freight rates, and LNG carriers are also seeing stronger pricing power due to expanded ordering, so the ship new building price is expected to turn upward."
The securities market expects LNG carrier ship new building prices to exceed $260 million (about 370 billion won) within the next 6 to 12 months, about 5% higher than at the end of last year. Jung said, "Of an expected 77 global LNG carrier orders 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 filled, so competition among shipowners for the 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 believe 2026 will be the year Korea's shipbuilding industry lays the foundation for entry into the U.S. defense market. After U.S. President Donald Trump on the 19th of last month named Huntington Ingalls Industries, Inc. (HII) as the prime contractor for the Navy's next-generation frigate, he announced plans to expand the program for the largest-ever surface combatant (BBG) to 20 to 25 ships, raising expectations of spillover benefits for Korea's shipbuilders.
Analyst Han Seung-han said, "If HII's shipyard proceeds with building the new frigate, production bottlenecks are inevitable," adding, "Ultimately, external cooperation is essential for HII's yard to handle the volume." As a result, for post–lead ship quantities, collaboration with Korean yards is being discussed, including 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.
However, the prevailing view is that it will take years for defense cooperation with the United States to yield visible results. Jung said, "For direct cooperation with Korean shipyards to proceed, changes to U.S. laws are essential, and depending on yard conditions, facility investment for warship construction may be needed," adding, "We should view 2026 as a year when Korean shipbuilders increase the potential for long-term cooperation with U.S. warship construction ahead of actually starting such work."
Research fellow Lee Eun-chang also predicted, "2026 will be a period to build the foundation for Korea-U.S. shipbuilding cooperation." He said, "For Korean shipbuilders such as Hanwha Ocean's Philly Shipyard to increase production in the United States, they need to train local workers, but hiring itself will not be easy," adding, "From receiving orders to designing and training personnel, next year will be a time of trial and error—an 'all over the place' period."
Korean shipbuilders have drawn up blueprints to expand overseas bases and boost capacity to respond to a structural boom. The Korea Institute for Industrial Economics & Trade (KIET) projects a sharp increase in overseas production by Korea's shipbuilding industry in 2026, centered on Vietnam (up as much as 20%) and the United States (up more than 20%).
Lee said, "With Korean shipbuilders' investment 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, will book 11 million to 12 million CGT in orders, maintaining a 3.5-year backlog."