Spain & Portugal
In Portugal, the GDP growth target for 2021 was 4.8%. At the end of the year, the central bank projected that the country’s economy would expand by 5.8% in 2022, mainly due to the deployment of European recovery funds. Meanwhile, Portugal’s ruling Socialists won an outright parliamentary majority in the general election on January 30.
COVID’s Omicron variant, rising commodity prices, existing supply bottlenecks and high energy costs represent major challenges for all European economies. With the European Commission having lowered its forecast for Spain’s GDP growth in 2022 from 6.3% to 5.5%, the country’s economic development depends on ongoing household consumption, implementation of recovery funds and the continuing spread of the virus.
In recent weeks, there has been strong local demand - especially for primary and secondary aluminium - in Spain and elsewhere in Europe. Scrap generation has been lower while yard operations and logistics have been unable to meet expectations owing to the large number of quarantined workers affecting the supply side. Both primary and secondary copper are mostly remaining in the Spanish market but exporting under of “End of Waste” has made it possible to access competitive prices in China, particularly for brass and copper.
Complexities persist with logistics in terms of availability of space on ships as well as of containers, trucks and drivers, thus keeping transportation costs high.
The current high demand looks set to remain in the coming weeks and there is optimism that prices will reflect this.