South Korea’s Shipbuilding Industry Outlook for 2025
South Korea’s shipbuilding sector is gearing up for a challenging yet ambitious 2025. HD Hyundai, the country’s largest shipbuilder, has set an increased order target for the year, despite anticipating a slowdown in overall industry growth. This comes amid fierce competition, particularly from Chinese shipbuilders. To support the industry, Korea’s Export-Import Bank plans to enhance its financing capacity, signaling a commitment to bolster South Korea’s position in the global shipbuilding market.
Increased Financing Amid Industry Challenges
The Korea Export-Import Bank, under the leadership of President Yoon-Hee-seong, has announced plans to increase its financing capacity for the shipbuilding industry by approximately 10 percent in 2025. This increase translates to about $8.2 billion available for ship exports, which is an additional $683 million compared to 2024. The bank’s decision reflects the need to support South Korean shipbuilders as they navigate a competitive landscape.
However, the outlook for shipbuilding orders is not entirely optimistic. Reports from Clarkson and other industry analysts suggest that overall shipbuilding orders may decline by nearly 30 percent in 2025. The projected orders are expected to drop to 42 million compensated gross tons (CGT), down from 59 million CGT in 2024. This decline highlights the challenges that South Korean shipbuilders face as they strive to maintain their market share against rising competition.
Despite these challenges, the Export-Import Bank’s increased financing aims to provide a lifeline for shipbuilders. The bank’s support will be crucial as companies like HD Hyundai focus on higher-value vessels and innovative technologies. By investing in eco-friendly applications, such as ammonia dual-fuel systems, South Korea hopes to differentiate itself in the global market.
HD Hyundai’s Ambitious Order Targets
HD Hyundai has set an ambitious target of $18.12 billion in orders for 2025, marking a 34 percent increase from its 2024 target. However, this figure is still 12 percent lower than the actual orders booked in 2024, which amounted to $20.56 billion. The company’s strategy focuses on building high-value vessels and adopting new technologies to stay competitive.
The shipbuilder has a robust backlog, with its near-term building slots already committed. The order targets are divided among its various yards: $9.75 billion at HD Hyundai Heavy Industries, $4.5 billion at the Samho yard, and $3.8 billion at the Mipo yard. This distribution indicates a strategic approach to maximize production capabilities across its facilities.
As the year begins, HD Hyundai has already made significant progress. The company delivered its first vessel of 2025, a 174,000 cbm LNG carrier, to an Asian shipping company. This vessel was ordered in 2022, during a record-setting year when the company secured 44 orders for LNG carriers. Additionally, the Mipo yard celebrated the naming of two ammonia dual-fuel vessels ordered by Exmar. The yard is also on track to deliver a 16,000 TEU containership and a 2,800 TEU vessel shortly.
The outlook for 2025 is promising, with scheduled deliveries across various ship categories. This includes 26 LNG carriers, 14 LPG carriers, two ethane carriers, and one liquid CO2 carrier. Furthermore, the company expects to complete a total of 40 containerships and 50 crude oil and product tankers. This diverse range of deliveries showcases HD Hyundai’s commitment to maintaining its leadership in the shipbuilding industry.
Strategic Focus on High-Value Ships
In response to the increasing competition from Chinese shipbuilders, South Korea has adopted a strategy focused on high-value and complex ships. While China continues to make strides in the LNG carrier segment, South Korea is prioritizing eco-friendly technologies and vessel automation. This strategic shift aims to enhance the competitiveness of South Korean shipbuilders in a rapidly evolving market.
By investing in innovative technologies, South Korean companies are positioning themselves to meet the growing demand for environmentally friendly vessels. The focus on ammonia dual-fuel systems and other sustainable practices reflects a broader industry trend towards greener shipping solutions. This commitment to sustainability not only aligns with global environmental goals but also helps South Korean shipbuilders differentiate themselves from their competitors.
As the shipbuilding industry faces challenges, South Korea’s strategic focus on high-value vessels and eco-friendly technologies may provide a pathway to success. By leveraging its strengths and adapting to market demands, South Korea aims to maintain its position as a leader in the global shipbuilding sector. The coming years will be crucial for the industry as it navigates competition and seeks to innovate in a changing landscape.
