HK Stock Market Move | Nickel stocks surged in early trading, as Indonesia's largest nickel industrial park may cut production by up to 40%. Institutions are optimistic about the long-term allocation value of the sector.

Nickel stocks saw a broad rise in early trading. As of the time of writing, XINXIN MINING (03833) is up 6.49%, trading at HKD 2.05; LYGEND RESOURCE (02245) is up 4.39%, at HKD 18.31; CNGR Advanced Material (02579) is up 3.29%, at HKD 25.72. In terms of news, due to droughts caused by the El Nio phenomenon, the supply of water to smelting plants in Indonesia's largest nickel industrial park has been restricted, and the park may have to cut production by as much as 40%. Dedy Kurniawan, the park's media relations officer, stated that if a new water source cannot be found, production may need to be reduced by 30% to 40%. Huachuang Securities believes that the nickel industry is showing gradually increasing long-term investment value amidst a resonance of multiple factors including supply constraints, rising costs, and layered demand. Considering the business layout of companies, it is suggested to pay attention to LYGEND RESOURCE, which integrates nickel trading and both hydrometallurgical and pyrometallurgical production lines to hedge against process fluctuations; and CNGR Advanced Material, which focuses on stable supply of Indonesian nickel raw materials and diversified precursor materials.