Silicon Valley's Newest Unicorn Is a Mining Company — Commodities Roundup

— Gold futures are 0.3% lower at $1,965.30 a troy ounce.

— LME three-month copper futures are down 0.2% at $8,251.50 a metric ton.

— Wheat futures are down 1.3% to $6.79 a bushel.

TOP STORY:

Silicon Valley’s Newest Unicorn Is a Mining Company

Some of the tech industry’s most prominent investors are doubling down on one of Silicon Valley’s latest unicorns: a mining startup.

Berkeley, Calif.-based KoBold Metals, which explores for metals such as copper, lithium and cobalt using artificial intelligence, is raising around $200 million in a fundraising round, said co-founder and Chief Executive Kurt House.

The capital injection values the company at more than $1 billion, he said. Part of that will be used to help it develop copper reserves it recently acquired in Zambia.

The fundraising round is backed by existing investors including Bill Gates’s Breakthrough Energy Ventures, a climate-tech venture-capital firm that invests money on behalf of the likes of Jeff Bezos and Jack Ma.

OTHER STORIES:

Stellantis, Foxconn Team Up to Sell Chips for Auto Industry

Auto maker Stellantis and tech giant Foxconn are joining forces with the creation of a new business that will sell semiconductors to the automotive industry, where demand remains high amid automation and the switch to electric vehicles.

The business will be called SiliconAuto and will be owned equally between Stellantis, which makes Jeeps and Chryslers, and Foxconn, the Taiwan-based tech group best known for assembling Apple Inc.’s iPhones in mainland China.

“SiliconAuto will provide customers an auto industry-centric source of semiconductors for the growing number of computer-controlled features and modules, particularly those needed for electric vehicles,” Stellantis said.

MARKET TALKS:

Japan Carmakers Seem to Have Edge in EV Battery Race, With Toyota in Lead

0851 GMT – As carmakers race to develop all-solid-state batteries for EVs, major Japanese players could hold a certain technological lead, Nomura analysts say. Nissan, Honda and Toyota have all been pushing ahead with plans to deploy the batteries–expected to dramatically boost EV performance–in the late 2020s, Masataka Kunugimoto says in a note. Of these, it is Toyota that seems to be ahead, as it has plenty of patents, has been quick to make prototypes, and is planning mass production from 2027-28. Though Nomura doesn’t see a sharp rise in battery output until at least the 2030s, it views the technology as critical in the medium term, as it makes EVs appealing to people who can’t charge them at home, like those who live in apartments. (fabiana.negrinochoa@wsj.com)

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Metals Mixed Amid Uncertain Macro Sentiment

0747 GMT – Metal prices are mixed with the macroeconomic outlook continuing to remain uncertain. Three-month copper is down 0.2% to $8,527 a metric ton while aluminum is up 0.3% to $2,241 a ton. Gold meanwhile is down 0.4% to $1,963.90 a troy ounce. “The bullish macro mood has lost some momentum,” Peak Trading Research says in a note. Peak notes that China’s central bank cut interest rates yesterday–a bearish signal for the yuan, which is the number one importer currency. Peak adds that the market will be looking to Federal Reserve Chair Jerome Powell’s speech on Wednesday, with markets looking for signals as to how many more rate hikes we are likely to see this year. (yusuf.khan@wsj.com)

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Oil Shrugs Off China Rate Cuts

0711 GMT – Oil prices are unchanged, showing little reaction to a rate cut from China’s central bank. Brent crude oil edges up 0.1% to $76.18 a barrel. WTI declines 0.8% to $71.38 a barrel. There was no settlement Monday for the U.S. oil gauge due to the Juneteenth holiday, meaning its price move reflects changes since Friday. China cut two of its interest rates by 0.1 percentage points. The move was widely expected but analysts were split on the scale of the cut, predicting a reduction of anywhere between a 0.05 percentage-point cut and a 0.15 percentage-point cut, according to FactSet. (william.horner@wsj.com)

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Pilbara Minerals’ 4Q Price May Undershoot Expectations

0455 GMT – Pilbara Minerals’ 4Q realized price shouldn’t be too bad, but could fall short of market expectations, UBS analysts say in a note. “We do note the [June quarter] realized price consensus average of US$4,030/ton looks a little high and question the quality of some estimates,” the analysts say. UBS predicts the lithium producer will record 4Q sales around 162,000 tons–with a grade of 5.3%–at an average US$3,360 a ton. Pilbara Minerals is up 2.7% in Sydney at A$4.95/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

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Global Steel Trade at Multidecade Low Vs. Demand

0330 GMT – The international steel trade as a proportion of global demand is at its lowest level since the 1970s, Citi analyst Ephrem Ravi says in a note. The global steel trade has been in decline since 2017, as trade barriers have increased, and in 2022 internationally traded steel accounted for less than 23% of apparent consumption, Ravi says. That compares to about 31% in 2016 and a peak above 39% in 2000, he says. Ravi expects the global steel trade to increase in 2023, but only marginally, encouraged by disconnected prices in big steel markets. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

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Vale Indonesia May See Limited Upside From Rise in Nickel Prices

0326 GMT – Vale Indonesia could see limited upside from the rise in nickel prices due to higher supply over the next three years, say CGS-CIMB analysts Ryan Winipta and Nathania Adjie in a note. However, the Indonesian miner seems to be on track to achieve nickel matte production of 70,000 tons in 2023, they add. They increase their 2023 net profit expectations by 5.0% to account for higher nickel matte selling prices in 1Q, but also note that prices of coal–which are used in the mining process–have been higher than expected. CGS-CIMB cuts its target price to IDR6,600 from IDR6,990, and maintains its hold rating. Shares are down 1.2% at IDR6,425. (yiwei.wong@wsj.com)

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Iluka Bear Says Rare Earths Prices Increasingly in Focus

0005 GMT – Rare earths prices are increasingly a focus of UBS’s Levi Spry in his analysis of Iluka Resources. Spot rare-earths prices of US$62/kg are down around 60% from 2022 highs, says UBS, which recently reduced its short-term price outlook. “While we still like Iluka’s Eneabba rare earths project for its geopolitical importance (and government backing) we now see capacity for prices to stay lower for longer given China’s current dominance and apparent (growing) reluctance to support prices, UBS says. The Eneabba project isn’t likely to have meaningful production until 2026, says UBS, so short-term swings in prices won’t materially impact its valuation. But the bank says “any potential changes to long-term rare earths prices will likely be meaningful and are of increasing focus for us.” (david.winning@wsj.com; @dwinningWSJ)

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