Although much attention has focused on the recent financial difficulties at Korean yards, they have seen relatively robust levels of contracting in 2015 so far. The industry in Korea remains highly consolidated: the 'Big 3' yards control a large proportion of the global orderbook and are the leading Asian builders of higher value units. Meanwhile, Korea's smaller yards are prominent in the tanker sector.

Compared to its Chinese and Japanese counterparts, the Korean shipbuilding industry is highly consolidated and 20 shipyards currently have a vessel on order, compared to 146 yards in China and 53 in Japan. Contracting at South Korean yards has been firm in the year to date in comparison to other builder nations, with 154 vessels of 7.0m CGT ordered. Only Chinese yards have secured a higher number of orders (190 vessels), while in CGT terms South Korean yards lead by a clear margin, taking 42% of total global orders in 2015 so far. However, turning healthy contracting volumes into profits has proved difficult in the current low price environment. Although the Won has depreciated by around 11% against the dollar since the start of 2014, aiding competitiveness, weak global demand for newbuild vessels has kept prices low.

South Korea's 'Big 3' shipbuilders (Daewoo, Samsung HI and Hyundai HI) are also the world's biggest. The three yards currently have 323 vessels totalling 18.9m CGT on order, equivalent to 17% of the global orderbook in CGT terms. Their activity is concentrated mainly in higher value sectors, with 80% of their joint orderbook in CGT terms accounted for by boxships and gas carriers. In numerical terms, the 'Big 3' account for 52% of VLGCs (60,000 cu.m. and above) and 68% of 'mega' boxships (18,000teu and above) on order globally. The orderbooks at these yards are also heavily 'back-weighted', with 46% of tonnage in CGT terms scheduled for delivery after 2016. Despite these strengths, their move into the higher value offshore sector has reportedly led to significant cost overruns, contributing to financial difficulties.

The remaining Korean yards are more focused on the tanker sector, which accounts for 55% of their combined orderbook in CGT terms, with bulkers, boxships and gas carriers making up a smaller share. Korean yards outside of the 'Big 3' account for 34% of the global tanker orderbook in CGT terms, with 284 vessels of 7.4m CGT currently on order. Nevertheless, many of these yards have still suffered financial difficulties. Looking forward though, there may be benefits to medium sized yards from consolidation, with the government reportedly encouraging the 'Big 3' to cooperate with other yards on 'eco-ship' designs.

Although subject to well documented financial issues, the 'Big 3' Korean builders are specialists in constructing higher value units, and appear to be supported by long orderbooks. Meanwhile, Korea's other yards account for a prominent share of the global tanker orderbook. Korean shipbuilding is highly consolidated, but with two groups covering different product mixes and often competing separately, the dynamics can be diverse.