Industry sources told Reuters that two senior metals traders are leaving Barclays Capital after it registered heavy losses on the London Metal Exchange aluminium and copper markets.

The sources named the traders as Iain Macrae and Christian Saunders. Barclays declined to comment. The two traders could not be reached for comment.

Traders said that the losses are said by traders to run into many millions of dollars and to stem from losing positions on the February-March 2012 aluminium spread on the LME. Copper options and spreads also lost Barclays money earlier this year,.

Another LME trader said that "I would think it is not only the failed aluminium, many other factors contributed.”

Several investment banks, including Barclays, in October began building large long aluminium positions into early 2012, trying to book profits during a tough year of unpredictable prices and dwindling consumer demand.

The banks were said by traders to be targeting those who have long-term financing deals on metal and hold it in warehouses. Owners of metal held in warehouses commonly hedge their positions by taking shorts position on the LME.

Since September, traders said Barclays had bid the February 2012 contract for aluminium up to a premium against March, but it dropped to a steep discount this week and Barclays was forced to liquidate the position.

(Sourced from Reuters)