A series of small explosions were heard throughout the mountain village of Avões, where the factory was located, and which locals claims made the ground shake.
Egas Sequeira, the owner of the small company, his daughter, niece and employees were among the victims, aged 22 to 52.
It is thought the first explosion occurred as fireworks were being loaded onto a lorry.
Locals who rushed to the scene recounted horrific scenes of finding bodies’ parts scattered across the site.
Scores of search and rescue workers including firefighters, police and forensic experts scoured the scorched site for any clues as to the cause of the explosion as well as the whereabouts of those reported missing.
Portugal’s Prime Minister António Costa has extended his condolences to the victims’ families, while Lamego council declared three days of municipal mourning for the victims in the tragedy.
The company was well-known throughout northern Portugal and supplied most of the region’s biggest festivals and events with fireworks.