Market Update Overview
In 2011, the world economy growth forecast is revised from 4.4% to 4% by International Monetary Fund and the developed economies are still showing a below forecast performance, such as US from 1.8% to 1.5%. With all those increasing factors we indicated in the last report, in general, we are now seeing the market will start to cool down due to the global economy and turning point is emerging--the measures have been taken to control the inflation in China and export volume is effected by the international market demand and currency exchange change. Below is the information about our individual products.

Ascorbic Acid and its derivatives
Ascorbic Acid pricing is still low, the quota story is again approved to be a rumor, we are expecting the Ascorbic Acid  and its derivatives will be very soft in the year 2012.

Beta Alanine
We are seeing that  the supply from Japan has resumed now and the pricing tends to be stable towards a reasonable level. Looking into 2012, we predict the pricing will be soft as too many new manufacturers hope to step in.

Betaine HCL/Anhydrous
The supply and price are stable.

Biotin
The supply and availability is very limited. The production at Zhejiang Medicine is not resumed yet due to gas leakage and the other manufacturer is controlling the selling market.

> Overview
> Ascorbic Acid and its derivatives
> Beta Alanine
> Betaine HCL/Anhydrous
> Biotin
> Choline Bitartrate
> Chondroitin Sulfate Sodium
> COQ10
> Creatine Monohydrate
> Glucosamine HCl/Glucosamine Sulfate 2KCl
> L-Arginine & its derivatives
> L-Glutamine
> L-Valine/L-Isoleucine
> D-Aspartic Acid
> L-Tyrosine/L-Leucine
> L-Tryptophan
> MSM
> Pyridoxine/Calcium D-Pantothenate
> Sodium Hyaluronate
> Sucralose
> Taurine
> Vitamin E
> Xylitol

Choline Bitartrate
The sales is increased and the pricing is stable.DNP also starts to stock Choline Chloride , which is another popular form of choline.

Chondroitin Sulfate Sodium
The demand and pricing is soft now.

COQ10
The market is currently stable.

Creatine Monohydrate
The pricing is stable now but we see there is still room to increase as the pricing is still in historical low level.

Glucosamine HCl/Glucosamine Sulfate 2KCl
The market is soft now and the availability is more than needed. As of our research, the chondroitin demand decreased by 30-50% this year. Chondroitin as we know is a key ingredient for joint health and often formulated together with glucosamine. This may be affected by the overall economy, but also as a result of overcapacity in production. The manufacturers are trying to make joint efforts to lift the market, but there are still many uncertainties and suggest stocking this product only on in-time basis.

L-Arginine & its derivatives
The market has been at the high level for quite a long time and finally starting to come down. L-Argining and its derivatives will gradually go to a reasonable level.

L-Glutamine
The supply is extremely tight due to the limited productioncapacity. The price has been increased each month from beginning of 2011 and all the way up to now. If you have good production plan 1-2 months ahead, we hope you can inquiry in front and place the order in front. The manufacturer has stopped quoting and this trend will continue toward middle of 2012.

L-Valine/L-Isoleucine
Some manufacturers are busy with pending orders, but generally the supply is stable. L-Valine and Isoleucine are produced from fermentation and some manufacturers are considering to using the same production line to produce L-Leucine which is in historical high level. If that takes place, the supply of Isoleucine and Valine may be getting tight. At current stage, we think it is good time to lock the pricing and place long term contract.

D-Aspartic Acid
We received positive feedback since last report and the sales are moving quickly on this new product for DNP. The stock is sold upon or even before its arrival. We will increase the amount of import on this one to be one of our new potential key products.

L-Tyrosine/L-Leucine
The price is still at peak level and high, but we see it comes down a little bit. This may be due to the yearend and the producers are trying to collect cash back as much as they can.

The market is in high level and we are seeing there is room for the market to come down and to be more reasonable and down further in Q1 2012.

L-Tryptophan
The price is stable. The manufacturer has great production capacity. The demand and supply is in balance.

MSM
The pricing is in new high level since last report. The cost out of China is even close to our sales pricing due to the starting material cost increase.

 Pyridoxine/Calcium D-Pantothenate
Pyridoxine（B6）supply is still very tight . However, after the electricity power shortage in the hot season, the pricing is coming down gradually. We suggest waiting for 1-2 months to get the supply again to get the best price.

Calcium D-Pantothenate –The market is still soft and the pricing is not increased with the starting material Beta Alanine, and now the pricing of Beta Alanine comes down , so we are seeing the market for B5 is still soft Q1 of 2012.

Sodium Hyaluronate
The pricing and market is stable for this product at this stage.

Sucralose
It is year end and peak for holidays and the demand is strong from candy and beverage industries. The availability is very limited and the supply won't be improved till the 2nd half of 2012.

Taurine
The cost at original site China is increased by 5% and also the import tariff is increased from 0% to 6.5% into US. This is also the peak time of procurement for giant beverage companies like red bull, so the market will be on an uptrend.

Vitamin E
DL-Alpha Tocoperyl acetate 50% powder and Oil price starts to be soft and we are seeing a down trend for both oil and powder by 10%.
D-Alpha Tocoperyl Succinate supply is still very limited. The manufacturer’s production is on and off due to the pollution control by government and the starting material is very short. In addition, the Chinese manufacturers also produce their own consumer finished products directly instead of bulk ingredient alone. We are seeing the pricing will continue to increase toward Q2 of 2012.

Xylitol
The price of Xylitol is stable without too much driving force to increase. The Chinese manufacturers are facing strong competition from Danisco who is the only producer in the western world. The Chinese product was known as cost leader, but the situation is different on this product because the weak economy in Europe has driven the labor and production cost down while these are still high in China.

Same as we mentioned in last report that the demand for Xylitol DC grade is still high and we increased the import by 20% to fulfill the current needs. The cost is also stable, same with Xylitol USP grade.

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