Nervous tension.

After 2004 produced a level of sustained strong prices for many nonferrous metals, some traders are understandably nervous about what 2005 will bring.

Speculators, in particular, may have tried to anticipate a market peak late in 2004, when prices for some LME metals began to fall. (Aluminum is an example. See the Commodity Focus feature beginning on p. 30.)

The scenarios that could produce sudden price plunges mostly focus on China. Speculators wonder when that nation's frenzied economic growth will begin to show signs of a slowdown. (Or more importantly, whether that slowdown will be a "soft landing" or a sudden crash.)

While commodities traders try to anticipate when the tide will turn, scrap dealers are reporting that metal is still flowing in both directions.

Nonferrous buyers say that contractor scrap, in particular, remains fairly strong, especially considering that some construction markets go through a noticeable lull during the winter months.

On the consuming side, shipments are still being organized to head overseas, despite proclamations and efforts from some Asian governments to scrutinize incoming scrap material.

U.S. Commerce Department numbers show that Asian inspections and restrictions may be having an effect on red metals exports, but that European buyers are returning to the scrap market and stepping in to buy available U.S. scrap.

(Additional news about nonferrous scrap, including breaking news and consuming industry reports, is available online at www.RecyclingToday.com.)