LONDON—Commodities trader Gunvor Group said Monday that it is pulling out of base-metal trading, joining a host of other well-known names to exit the business as the price of copper, nickel and other metals falls.

The Swiss-based company will also wind down its business warehousing metals as margins come under pressure from falling prices.

"In assessing the situation, we saw that profitability was decreasing while risk was increasing, and the outlook just didn't meet our internal requirements for return on equity," said Seth Thomas Pietras, Gunvor's corporate affairs director.

Four traders will leave the firm but a core team will be left to help wind down its existing position, a person familiar with the matter said. Those departures include senior trader Rene Van Der Kam, this person said.

The precious metals, iron ore and specialty ore businesses will remain, this person said.

Base metals prices have been battered by a slowdown in demand from top consumer China after years of strong double-digit economic growth. Metals from copper to zinc have hit multi-year lows recently.

"Should we be surprised given the current environment?" said Robin Bhar, head of metals research at Socié té Gé né rale SA. "It's a tough world out there to make any money [and] they must have struggled."

The decision follows that of Trafigura Beheer B.V., which closed its metal fund last November citing difficult conditions in commodities markets. Noble Group Ltd. has also reduced its exposure in many metals as its portfolios take a hit.

Many large banks have also left this business. Most recently, that included Barclays PLC, which announced in late January that it was exiting metal trading.

Only a handful of big trading houses and banks are left in metals trading. That includes Glencore PLC, Mercuria Energy Group, Goldman Sachs Group Inc. and Bank of Nova Scotia.

Gunvor was founded in 2000 by Gennady Timchenko, a member of Russian President Vladimir Putin's inner circle, and Chief Executive Torbjorn Tornqvist. The company built its reputation selling Russian oil, but diversified into other commodities including coal and precious metals.

Write to Ese Erheriene at ese.erheriene@wsj.com

(END) Dow Jones Newswires

February 01, 2016 13:15 ET (18:15 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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