Chen Lin: Chinese Volatility Could Fuel a Lithium-Price Rocket Launch

When China’s stock market started cratering at the beginning of the year, veteran investor and newsletter writer Chen Lin was rubbing his hands in anticipation of the opportunities that would be opening up, particularly in lithium and natural gas. In this interview with The Energy Report, the author of What is Chen Buying? What is Chen Selling? shares his insights on what pushed battery-grade lithium prices up fourfold and which companies could benefit from a continued supply-demand imbalance. As a bonus, he also lists the three companies he thinks could take advantage of high overseas natural gas prices to actually return money to investors in the energy space.

The Energy Report: The year started with a very volatile Chinese stock market. Are we in crisis mode?

Chen Lin: That was actually mostly related to the Chinese currency. Every Chinese citizen is “entitled” to exchange $50,000 per year. At the end of last year and the beginning of this year, people rushed to use their quotas. I heard reports that the banks were crowded, the website was too busy, and people couldn’t get their exchanges completed in time to catch the trend before it went down further. Yes, there was a little bit of panic in China that likely led to the stock market drop. Also, you need money to exchange for the U.S. dollar, so some investors may have sold stock. All this led to a very volatile Chinese market.

Are we in a crisis mode? That’s hard to say. It’s really up to the Chinese government and how it handles this situation. Right now, my view is as long as the Chinese renminbi goes down in an orderly fashion, we should view it as a positive for the rest of the world.

“Pan Orient Energy Corp.

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