Contrarian Wells Fargo is trying to build out their commodities business, while others shut down shop (Photographer: Peter Foley/Bloomberg)

Contrarian Wells Fargo is trying to build out their commodities business, while others shut down shop (Photographer: Peter Foley/Bloomberg)

As most other banks try to offload their commodity trading desks amid weak commodity prices, Wells Fargo is attempting to build a desk in London, according to reports.

Janet Mirasol was hired last month from R.J. O'Brien to lead their OTC and listed derivatives team in New York.  Wells will look to add commodities traders to work from London and who will report to New York.  Mirasol was brought in to build up a new metals business in New York and now looks to gain support in Europe.

Earlier this month, Deutsche Bank announced it would close its physical commodities trading business amid mounting regulatory issues.  They are one of the top five commodotity houses with others also following.  Many of these banks are maintaining their passive commodity index businesses which are much more profitable and that demand less regulatory scrutiny.

Citigroup estimates that $36 billion has left commodity index funds this year, compared to a $27.5 billion inflow of capital in 2012.  This comes amid weaker than expected growth from BRICS countries which are feeding lower commodity prices, especially in the precious metals.

Read: Wells Fargo Looks To Build Commodities Desk in London