Dozens of traders have recently quit top commodities trading banks such as Barclays, Goldman Sachs (GS.N), Morgan Stanley (MS.N) and Merrill Lynch (BAC.N) to traders such as Glencore (GLEN.L), Vitol, Gunvor and Mercuria.

The outflow is driven by shrinking profits and tighter regulation of banking, which gives trading houses greater scope to trade and to reward success.

However, the departure of a figure of the calibre of Jones, who alongside Isabelle Ealet from Goldman Sachs and David Silbert from Deutsche Bank, is seen as one of the most prominent figures in commodities trading in Europe, is rare.

Barclays has been a star of commodities trading among European banks over the past decade but was overtaken by Deutsche last year after sharp losses in metals.

However, Barclays' fixed-income, currencies and commodities (FICC) trading results were up 9 percent in the first quarter with commodities trading on the rise.

"Barclays' underlying commodities business remains strong and well diversified," said a source close to Barclays. It is not yet clear who might replace Jones.

NON-OIL DIRECTOR

Jones will become the head of non-oil operations at Mercuria, a senior industry source said. Jones, who has been at Barclays for a decade, previously worked with the co-founders of Mercuria, Marco Dunand and Daniel Jaeggi, at Phibro.

Mercuria, founded in 2004, has expanded rapidly from its base in crude and oil products trading and has now an annual turnover of around $80 billion with operations in energy, metals and other commodities.

By comparison, the world's top trader Vitol had revenues of $297 billion in 2011 and No.2 trader Glencore had revenues of $186 billion.

Geneva-based Mercuria is one of the world's top five energy traders and says it moves almost 120 million tonnes of oil, coal and gas a year.

The source said Jones would "effectively be number three" at Mercuria, with a wide-ranging brief to help expand the trading company's operations in non-oil commodities.

Mercuria announced on Thursday a major expansion into base metals with new trading units in London and Shanghai and up to 15 new hires, recruiting Ben Green and Liam Brown, both previously senior metals traders with Goldman Sachs commodities group. [ID:nL5E8G2HNU]

Mercuria's metals trading groups is expected to focus primarily on copper, aluminium, zinc, nickel, tin and lead, with activity in the London Metals Exchange (LME), New York Mercantile Exchange (NYMEX) and Shanghai.

(Additional reporting by Dmitry Zhdannikov, editing by William Hardy)

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