Global commodity trader IXM is expanding its portfolio into iron ore, three people familiar with the matter said, even as near-record-low price volatility of the steelmaking ingredient cuts profit-making opportunities and suppresses investor interest.

Geneva-based IXM, one of the world’s largest traders of physical non-ferrous metals such as copper and nickel, last week signed a prepayment deal with Brazilian miner Itaminas to lock in supply, said one of the people, who requested anonymity as they were not authorized to speak to the media on the matter.

Terms of the deal were not immediately available.

IXM and Chinese parent CMOC Group did not respond to requests for comment on issues such as reasons or timing. Itaminas declined to comment on commercial matters.

The expansion comes as iron ore price fluctuation has become less acute over the past four years in the $132 billion market of top buyer and consumer China. State buyer China Mineral Resources Group has been purchasing iron ore on behalf of an increasing number of steel mills, suppressing volatility.

IXM’s trading portfolio includes cobalt, copper, gold, nickel, lead and zinc, its website showed. IXM started trading iron ore this month, a second person said.

The company appointed Saurabh Phadke as head of iron ore as of July, Phadke’s LinkedIn profile showed.

Phadke, who traded iron ore at Trafigura before joining IXM on the non-ferrous concentrates desk in 2023, could not be reached for comment.

Also this month, IXM researcher Li Yi spoke at a webinar run by brokerage Xinhu Futures on ferrous market fundamentals.

An iron ore price volatility index has trended steadily lower to 17.99 on July 28, having peaked at 78.97 on March 10, 2022, showed data from data provider Wenhua Caijing. The figure has stayed below 20 for most of this year, skirting the record low of 11.84 hit on December 9, 2019, the data showed.

One Singapore-based asset manager, declining to be identified, said the reduction in volatility had led him to cut the share of iron ore in his portfolio to around 50% this year from as much as 90%, in favour of metals crucial to energy transition such as copper and aluminum.

(By Amy Lv and Tom Daly; Editing by Tony Munroe and Christopher Cushing)