UPDATE 1-Mercuria appoints head of new Asian coal, metals team

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By Jacqueline Cowhig and Manolo Serapio Jr

LONDON/SINGAPORE Oct 18 (Reuters) - Energy trader Mercuria has hired Marcus Lyu to head its newly formed Beijing-based "hard commodities" team as part of its broader Asia growth plans, the company said on Thursday.

Lyu joins Mercuria from Noble Resources.

The "hard commodities" team will bring together thermal coal, coking coal and coke, iron ore and steel trading and Tom Qi also joins the firm as head of iron ore trading from MRI.

Marcus Lyu, who resigned from Noble recently, was a senior executive at the firm who had built up an enviable and substantial business in China for Noble, sources at rival traders said.

Mercuria, a Swiss-headquartered, privately-owned trading house which has grown rapidly since its foundation in 2004, announced last week that Chinese state oil company Sinopec is buying half of tank firm Vesta Terminals through a joint venture with Mercuria.

The deal gives Sinopec Kantons Holdings access to 10 million barrels of oil products storage in Europe but the aim is for this to be an international venture, sources close to the deal said.

China is the world's biggest importer of iron ore and its projected need for all the ingredients to make steel as well as thermal coal for power generation underpins the medium to long-term plans of traders, mining houses and shipping firms.

There are many synergies between the coal markets, iron ore and freight - for example, the same ships are often used to carry iron ore on one leg of a voyage and coal on the return.

Many trading companies moved into coal trading in recent years and a few started iron ore trading last year, a period of extreme price volatility.

"Our intention is to continue to grow our footprint in hard commodities across Asia with emphasis on the China market," said Jin Han, president of Mercuria Asia Group Holding Pte Ltd.

"This new approach to our business is designed to have the greatest benefit in terms of service for our customers, by bringing together a number of related trading and investment activities. We are consolidating all these activities under the leadership of Marcus Lyu".

Thermal coal trader Wei Jin becomes Lyu's deputy head of hard commodities at Mecuria while Tom (Zongchao) Qi joins the firm as head of iron ore trading, the company said.

The hard commodities team will focus on trading flows into China and complement Mercuria's other activities in Asia and will itself be further supported by a marketing division, headed by Mercuria's Angela Yijia Li.

A shift away from annual iron ore pricing in 2010 to a spot-based system set in motion the development of an iron ore market and prompted many trading houses to move or increase their exposure to the industrial commodity.

Prices hit nearly $200 a tonne in February 2011, more than triple the level of late 2008, fuelled by China's industrialisation. But this year prices have plunged since early July, losing nearly $49 to hit a three-year low of $86.70 a tonne, as China's steel demand slowed with its economic growth and there were widespread price renegotiations by Chinese buyers of coal and ore, following the slump in the prices of both commodities. (Editing by James Jukwey and Greg Mahlich)