Portugal & Spain

While material shortages continue to drive the market in Portugal and Spain, demand typically slows during the winter months, with prices remaining below export levels owing to persistent oversupply. However, recent exchange rate fluctuations have made local prices more competitive and attractive.

A key concern for the local market is that, since the ban on e-motor exports outside the EU came into effect on January 1 this year, prices have remained significantly below export levels. Primary aluminium prices have started to decline owing to the economic slowdown and weakness in the automotive and construction sectors. Exporters are also closely monitoring ongoing EU-US trade negotiations, particularly regarding significant tariffs on US aluminium imports from Europe. However, this has not affected local prices at the time of writing.

Portugal’s economy is expected to grow by 2.2% in 2025, with steady consumer confidence and a stable labour market. S&P has upgraded the country’s credit rating to “A” owing to its stronger financial situation. Portugal’s fiscal position remains solid, with a slight reduction in the projected budget surplus. Overall, the economic outlook remains positive, with moderate growth and controlled inflation.

Inflation in the Eurozone fell to 2.4% in February, supporting the European Central Bank (ECB) rate cut to 2.5% this month. The ECB’s monetary easing aims to boost growth amid ongoing trade challenges.

Spain’s economy continues to show resilience, with its GDP growth of 3.2% in 2024 outpacing the eurozone and a revised forecast of 2.6% for 2025. Unemployment declined to 2.59 million in February, aligning with projections of 11% for 2025. Inflation rose slightly to 2.9% in January but remains within a manageable range, with expectations of stabilisation around 2% in the coming years. The service sector is a key driver of expansion; however, the manufacturing sector has contracted for the first time in over a year. Spain’s economy remains robust despite global trade tensions and a slow eurozone recovery.