COMMODITY trading giant Mercuria has axed up to a quarter of its Shanghai trading team, including base metal and petrochemical traders, as it looks to reduce the risk in its portfolio, according to three sources with knowledge of the matter.

Around 10 people have left the Geneva-based trading house’s Shanghai office since November, said the sources, who put the previous headcount on the Shanghai team at 40-50. The sources declined to be identified.

Uncertainty over China’s demand growth for industrial metals has increased risk for traders in a difficult year that has seen the economy cool in the world’s top metals consumer amid a bruising trade war with the United States.

Mercuria’s metal trading operation saw the biggest number of casualties under the Shanghai restructuring, said the sources, who added that two petrochemical traders were also let go. The company’s China oil trading team operates out of Beijing instead of Shanghai.

“Some of the metals business in Shanghai is not making money but is rather capital intensive and carries relatively high risk,” said a trading executive with knowledge of Mercuria’s restructuring.

“That is why some of the business and staff were being removed so that the resources could be diverted to sectors with higher return,” he added.

(SD-Agencies)