Portugal & Spain

The secondary raw material market for copper is being driven by high LME prices, resulting in more supply than in recent months. The Grasberg shutdown in Indonesia, the result of force majeure following a mudslide, has heightened uncertainty amid increased copper supply risks. Premium aluminium prices are rising, with many customers seeking to secure material ahead of the implementation of the Carbon Border Adjustment Mechanism on January 1 next year. Meanwhile, geopolitical tensions continue to fuel uncertainty, weighing on the near-term recovery of the scrap market. 

Portugal’s economy rebounded in the second quarter of 2025. GDP climbed 0.6% quarter on quarter and 1.9% year on year after a first quarter dip, helped by stronger private consumption and firmer exports. Headline inflation cooled to an estimated 2.4% year on year in September, with core inflation around 2%. The labour market remains tight: the unemployment rate fell to 5.9% in the second quarter and employment hit new highs. While tourism continues to support Portugal’s economy, external trade is a soft spot: goods exports fell 11.3% year on year while imports rose 2.8%, widening the goods trade deficit to around Euro 3.3 billion. Housing remains overheated, with INE’s House Price Index rising 17.2% year on year in the second quarter. This has prompted new government measures, including a higher property transfer tax for non-resident buyers.

Investor confidence has improved, capped by S&P’s upgrade of Portugal’s sovereign rating to A+ in late August, citing resilient growth and continued debt reduction.

Meanwhile, Spain’s economy continues to outperform the Euro area, driven mainly by domestic demand. The labour market is at its strongest since 2008, with unemployment at 10.29%. Inflation moved slightly higher in September owing to base effects from energy. National accounts show growth led by households and investment. Tourism remains a key driver, achieving 13.1% of GDP in 2025, and is expected to continue its growth into next year.

Investor confidence has strengthened with multiple rating upgrades in late September, while a sizeable current account surplus persisted throughout the summer tourism season.