Aluminum deliveries into warehouses run by big banks and trading firms have plunged this summer, highlighting Wall Street's retreat from the once-lucrative commodities business amid stagnant markets, new rules and regulatory scrutiny.

The slump marks the unraveling of a practice that boosted profits for several years at warehouse operators including Goldman Sachs Group Inc. (GS) and Glencore Xstrata PLC (GLNCY, GLEN.LN, 0805.HK). Bank warehousing practices now are the subject of investigations by several U.S. authorities, including a Senate panel.

The reversal underscores Wall Street's efforts to wring profits out of power plants, oil pipelines and metals warehouses. After spending billions of dollars in a decadeslong expansion into all corners of the raw-materials business, Goldman Sachs, J.P. Morgan Chase & Co. (JPM) and Morgan Stanley (MS) are trying to sell commodities assets.

'The game as we know it seems to be over,' said James Malick, a partner in the capital markets practice at Boston Consulting Group. 'It's hard to see anything new that is bolder, bigger or better' in commodities.

In warehousing's heyday, the firms offered aluminum producers cash, rent discounts and other incentives to put metal into storage rather than selling to users such as brewers and soft-drink makers, according to analysts and traders. Meanwhile, the prolonged time in inventory generated hefty rental income for warehouse owners that more than made up for the incentives paid out.

Industrial aluminum users such as Coca-Cola Co. and aluminum-sheet maker Novelis Inc. have complained to the London Metal Exchange that warehouses had artificially slowed the release of aluminum, limiting supply and driving up prices. A MillerCoors LLC executive testified in a Senate banking committee hearing last month that the practices were inflating consumer prices by billions of dollars.

Glencore, Goldman Sachs and J.P. Morgan declined to comment.

Average daily aluminum shipments to LME warehouses were down 79% in the first 19 days of August from two months earlier, according to data provided by New York-based metals consulting firm CPM Group Inc. August's daily average rate of aluminum deliveries is the lowest since November 2011, CPM Group said.

At the same time, the cash incentives dangled before producers by the banks and trading firms that own the facilities recently have dropped to $50 a metric ton from more than $200 this past spring, traders said.

As more metal comes back into the market, the premium charges for immediate delivery have fallen 7.2% from their record in July, according to Platts. On Tuesday, LME aluminum for three-month delivery closed at $1,914.50 a metric ton, down 7.6% this year.

Spurring the bank pullback: A decline in commodity profits amid more-placid markets that have limited trading opportunities and increased capital requirements that have made running these businesses more expensive. Commodity revenue at the 10 largest global investment banks in 2012 fell 57%, to $6 billion, compared with 2008, according to Coalition, a research consultant. In the first half of 2013, revenue fell 25% from the same period last year.

Raw-materials trading in 2008 generated as much as a third of revenue within large banks' market-making business, which matches buyers and sellers in the fixed income, currency and commodities markets; it now accounts for less than 7%.

'As things stand right now it's a very, very bleak picture,' said Paul Johny, researchdirector of Coalition.

Employment in commodity divisions at the 10 largest global investment banks dropped to 2,183 at the end of the first quarter from its peak of 2,775 at the end of 2010, according to Coalition.

J.P. Morgan plans to sell physical assets such as warehouses and power plants. The Wall Street bank has told potential buyers of its commodities assets that it expects to kick off sale efforts in early September, said people familiar with the sale process.

Goldman Sachs has explored a sale of its metal-warehousing unit, Metro International Trade Services. Metro International has maintained a stockpile of more than 1.5 million tons of aluminum, or about 27% of the LME's global inventories of that metal, at its Detroit facilities. Metro operates 29 of 37 LME-licensed warehouses there.

UBS AG (UBS, UBSN.VX) last year closed all of its commodity trading desks not tied to precious metals such as gold and silver.