The Zhitong Finance App learned that nickel stocks generally rose in early trading. As of press release, Xinjiang Xinxin Mining (03833) rose 6.49% to HK$2.05; Liqin Resources (02245) rose 4.39% to HK$18.31; and Zhongwei New Materials (02579) rose 3.29% to HK$25.72.

According to the news, due to the drought caused by the El Niño phenomenon, water supply to the smelter in Indonesia's largest nickel industrial park has been limited, and the park may have to cut production by as much as 40%. Its head of media relations, Dedy Kurniawan, said in a statement that if new water sources cannot be found, the industrial park may have to cut production by 30% to 40%.

Huachuang Securities believes that under the resonance of multiple factors such as supply constraints, rising costs, and stratified demand, the medium- to long-term allocation value of the nickel industry is gradually showing. In line with the business layout of the enterprise, it is recommended to focus on simultaneously laying out nickel trade, wet and fire production lines to hedge against process fluctuations; Zhongwei New Materials, etc. to lock in Indonesian nickel raw materials and balanced amounts of diverse precursor materials.

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