May 2 (Reuters) - Goldman Sachs declined to say whether it was scaling back its iron ore business after a source close to its London-based operations said its leading trader had gone back to trading coal alongside iron ore in the last two months.
Jeremy Peters, who previously worked on Goldman's coal derivatives desk, started to trade iron ore derivatives when Goldman Sachs entered this market in early in 2011, quickly becoming one of the top ten players in this small but growing sector.
One source, who declined to be named, said: "Goldman had a few impediments starting to trade physical iron ore and decided the derivatives market wasn't quite liquid enough to justify the full time activity."
Goldman Sachs declined to comment.
One London-based iron ore swap broker added: "Since Jez (Peters) went back to trade coal we have noticed Goldman has been less active in iron ore. He had been quite an active player in the past."
By the summer Goldman was also looking to trade physical iron ore to enhance its trading opportunity in the paper market but like other U.S. investment banks such as Morgan Stanley, it has not been able to get approval from the U.S. regulator to trade physical iron ore yet.
Goldman has also seen other moves on its coal desk recently. Swaps trader Bruno Roches left a month ago and Raoul Duysings joined the coal desk from utility/trader EDF Trading.