October 12, 2015 / 11:16 AM / 4 years ago

Mitsui to shut precious metals business in London, New York-sources

* Mitsui latest to join broad retreat from some commodity markets

* Trades precious metals in Tokyo, Hong Kong, London, New York

By Clara Denina

LONDON, Oct 12 (Reuters) - Mitsui will close its precious metals businesses in London and New York at the end of this year, two sources familiar with the situation said, due to sliding commodity prices and more stringent regulation.

“Mitsui is shutting down precious in London and New York in December,” one source said.

A spokesman for the Japanese trading house declined to comment.

Mitsui, which started trading precious metals in 1970, is the latest to join a retreat by banks and brokers from some commodity markets as profits and prices tumble on concern about slowing Chinese economic growth.

Mitsui & Co. Precious Metals Inc, a wholly-owned subsidiary of Mitsui & Co incorporated in the United States, has a team of approximately 50 trading gold, silver, platinum, palladium, rhodium, ruthenium and iridium from offices in Hong Kong, London and New York.

The sources did not know how many jobs would be affected across trading, sales and research.

Mitsui trades precious metals on the Tokyo Commodity Exchange (TOCOM) in Japan and also has offices in Hong Kong.

“The decision will affect global operations, as it will reduce volumes,” the second source said.

The trading house also participates in the twice-daily auction setting the London silver benchmark run by the Chicago Mercantile Exchange and Thomson Reuters. Its withdrawal would leave five banks to set the price.

Last month, Mitsui was included by Switzerland’s competition authority WEKO on a list of banks being investigated for possible collusion over the pricing of precious metals.

Mitsui not only joins Western banks, including Barclays and Deutsche Bank, in cutting back on commodities, but also Mitsubishi UFJ Securities International Plc, which withdrew from its London-based commodities business, last year.

Commodities trading revenue for 10 of the world’s biggest banks continued to fall to $2.6 billion in the first half of 2015, compared to $3.5 billion in the same 2014 period, according to estimates from analytics firm Coalition. (Additional reporting by A. Ananthalakshmi in Singapore. Editing by Veronica Brown and William Hardy)

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