Much of the difficulty came from the insatiable demand from China for non-ferrous metals, leaving little for other countries, which themselves experienced an increasingly strong demand.
As prices for non-ferrous metals began to rise, this attracted speculative buyers looking for assets that could provide value. So hedge funds, commodity trading associations and mutual funds, such as pension funds, started to invest in non-ferrous metals. The result was added volatility in the market.
So what does the future hold around the world and can the situation improve for UK merchants?
At the Bureau of International Recycling World Recycling Convention held in London last week, members of the non-ferrous industry discussed the global situation.
Speaking at the convention, Macquarie Bank commodities analyst Adam Rowley said that he expected 2005 to offer much of the same. But he added: Demand growth rates will slow but not collapse both for the Western world and for China. The supply growth depends on the metal, but in most cases there will be fairly strong growth in response to this years high prices.
He predicted that the supply and demand gap would narrow, but copper, aluminium and zinc would still have more demand than supply. This would mean that there would be continuing high prices and volatility in the world market.
However, Rowley thought that prices were not likely to grow much next year. But some respite could be on the way. He said: Prices will come down in 2006 as supply finally catches up with demand, but they will still be above normal expected levels.
Demand from China is also expected to slow slightly as its economic growth drops, though its expansion will continue to be rapid. But behind this global picture, the situation is patchy in different regions. In the US, secondary aluminium prices are lower as supply is plentiful.
Alter Trading vice-president of non-ferrous marketing Robert Stein said: There is a significant supply of scrap and the hurricanes of September exacerbated the situation.
But even in aluminium there remain some shortages of some grades. While brass and bronze ingot makers find themselves short as Europe and the Far East took significant quantities from the US in the summer.
Stein added: The outlook for the balance of the year remains good, although the buying frenzy evident throughout the year has certainly eased.
In Europe, the situation is patchy too. The French market has seen copper prices rise by 10% in a single month, but aluminium traders have attempted to increase profit margins by not increasing scrap prices.
Generally, though, the situation is good in France. But merchants are concerned that the volatility seen in the rest of the world will affect them because of high prices at the London Metal Exchange.
With Germanys economy remaining sluggish, and the possibility that the General Motors-owned car-firm Opel may have to cut 10,000 jobs, German traders are treading cautiously. Margins have been tight and demand has been based on short-term needs, and this situation is likely to continue.
The volatility and high prices generally seen around the world are affecting the UK market too.
Mountstar Metal Corporation MD Michael Oppenheimer explained that he believes prices may even rise higher. He said: We believe that following the recent correction there will follow a further bullish rise. Traders who share the same opinion have been locking in discounts at better terms in Europe, despite the rise in copper quotations as consumers remain short of feedstock.
Competition in the UK market is making it extremely difficult for scrap traders. Despite the high prices, merchants cannot take advantage because of a lack of metal. With the UK matching the global si