Product Updates

Ascorbic Acid Coated, DC97 and USP

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

L-Ornthine AKG/D-Aspartic Acid

L-Tyrosine/L-leucine

MSM

Pyridoxine HCL B6/ Calcium D-Pantothenate B5

Sodium Hyaluronate

Sucralose

Taurine

Vitamin E

Xylitol

The Ingredient Times is back!

DNP Q2 Market Review

In the first quarter, we predicted the market would be on an uptrend. We now see the uptrend is becoming sharper and is likely to continue in Q3 and even towards the end of the year. Several key amino acids used in the bodybuilding industry are in an extremely short supply and the prices are changing rapidly out of China. The situation feels similar to what we experienced during the 2008 Beijing Olympics, but the difference is that while the Beijing Olympics was a one-time only event, the current situation is a result of a combination of inflation, increasing demand, production limits and natural disasters.

Inflation—at the time this article is being written, the central bank of China will increase Reserve Requirement Ratios by 0.5% and this will be the adjustment for the sixth time this year which will make the RRR at a historically high level.

Increasing demand—new formulations based on amino acids are becoming more popular. Amino acids that were once only used as nutrients for protein synthesis are now being used in personal care products such as toothpaste, lotions, shampoos and more. Additionally, amino acids are added in the flavoring to improve and/or neutralize the taste of human food.

Production limit—The Chinese government is taking strict measures to protect the environment from pollution. If manufacturers cannot comply with requirements, they will be forced to shutdown to make all necessary improvements. Some manufacturers cannot afford the cost for waste water treatment so they choose to close their business. Others may choose to relocate their facilities to an area where they can hire cheaper labor, usually in a location further away from the downtown area. Another option a manufacturer has is to increase the cost of the product in order to maintain profits while meeting the pollution requirements of the government.

Natural disaster-- Southern China is experiencing droughts and floods at the same time. The droughts have reduced the power plant output and many factories located in Jiangxi, Hubei, Hunan, are shutdown from time to time due to lack of power. In the meantime, the heavy rain is pouring in other areas. The harvest, as well as production schedule and transportation are all affected.

The situation in Japan tends to be stable. Although due to the nuclear power plant shutdown, electricity is in very short supply. The concerns of food contamination by radiation are still high and many shipments are held by FDA for inspection causing longer lead times.

Facing these changes and challenges, DNP has worked very hard to fulfill all obligations to our customers and at the same time control our costs. If the price has to be increased, we hope to be the last one to do so in the market.

Below is a summation of our top items. Please stay in touch with your sales rep for the latest updates. We look forward to earning your business.

Product Updates

Ascorbic Acid Coated, DC97 and USP

Different from other ingredients, Vitamin C pricing is stable. As of today, the export quotation policy is still not officially issued by Chinese government, but many reports and insiders indicate that the quotation limits will be issued very soon. Our suggestion is that it is a good time to accumulate stock as the selling price is close to the cost. The price is at a historically low level and manufacturers will be holding the production during the summer months for maintenance. Also, once the quotation is issued, the cost will start to increase.

Beta Alanine

The scenario of today’s beta alanine is somewhat similar to that of creatine mono 10 years ago. The acceptance and recognition of this ingredient used in the bodybuilding industry has been substantially enhanced and expanded. The demand is on a strong rise while the supply is temporarily in short. We are working hard to expedite shipments and get more availability.

Betaine HCL/Anhydrous

The supply and price are stable. The price increases a small amount due to the currency exchange, but DNP is able to keep it constant and unchanged for now.

Biotin

The supply and availability is very limited. The quotation from manufacturers has increased by 150-200%. Actually, since 2009, the price of biotin has been at a historically low level and manufacturers were making slim profits or even losing money just to keep the business going. Now, Zhejiang Medicine has stopped production due to a gas leakage in the workshop, so we are predicting the price will increase and stay at a higher and favorable level for the producers.

Choline Bitartrate

The supply is stable and the sales of this product continue to increase over the past few months. We have increased the quantity imported and hope to get a better market share on this product. We are also able to provide choline bitartrate coated and choline chloride. We welcome any inquiry for all choline products.

Chondroitin Sulfate Sodium

The demand is stable and the manufacturer’s production line is fully scheduled for blanket orders. The price for on the spot buying market has started to increase.

COQ10

We are predicting the demand for Chinese material will be on a rise against declining demand of Japanese material due to concerns of radiation. Requests of large quantities are received much more frequently and we have inflated the import quantity to stay more competitive on pricing. The current stock is USP fermentation grade and we also welcome inquiries of our 20% water soluble version.

Creatine Monohydrate

The acceptance and demand for creatine mono are steadily increasing. The price has also increased by 8%-10%. As one of the most important products for DNP, we have secured long term contracts with manufacturers and availability is guaranteed.

Glucosamine HCL/Glucosamine Sulfate 2KCL

Glucosamine is produced from the shell of shrimp and crab. Due to the droughts and floods in South China, we think the harvest of these aquatic/fishery products will be greatly affected. The manufacturers’ production line is full in schedule and preparation for extra stock to face the possible shortage of starting material.

L-Arginine & Its Derivatives

The demand has been high in the past 3 months and we are predicting the trend will continue in Q3 if the production capacity still remains the same. The basic form of arginine (l-arginine base and L-arginine mono HCL) has begun to be used in personal care formulations. Arginine is the starting material for its family members like Ornithine, L-citrulline and also for its derivatives such as L-arginine AKG, L-arginine ethyl ester diHCL, L-arginine malate, L-arginine L-aspartate. All those ingredients are substantially demanded in the bodybuilding industry to improve fitness and enhance energy.

L-Glutamine/L-Valine/L-Isoleucine

The price increases by 5%-8% due to the currency exchange rate and cost increase. We successfully partnered with quality manufacturers in the past few months allowing us to increase our import quantity considerably. This will ultimately allow DNP to provide competitive pricing to our customers.

L-Ornthine AKG/D-Aspartic Acid

The above two products are new for DNP, but have already become popular in the bodybuilding industry. We are anticipating feedback these two products but most importantly, we have them in stock now.

L-Tyrosine/L-Leucine

The supply is very limited and price increases by approximately 50-100%.Through our visit to manufacturers, we find the production is greatly affected by the government’s pollution regulations. Some manufacturers are shut down and forced to quit; some are being relocated and very few of them can maintain their normal production.

MSM

The price increased by 10%-15% and with blanket orders in place with manufacturers, we should be able to keep the price stable at this time.

Pyridoxine HCL B6/Calcium D-Pantothenate B5

Pyridoxine(B6)supply is affected by the electricity powder shortage. Calcium D-pantothenate –We are predicting that the price will be on an uptrend in Q3 as there is a shortage of its starting material/intermediate beta alaine. If you have regular demand of the above two products, it is advisable to increase your inventories at this time.

Sodium Hyaluronate

There is a sign of overcapacity of production. Many manufacturers in Shandong province have launched production and the fermentation technology has been quite mature and assessable. It is well managed by more and more producers.

Sucralose

As mentioned in the last report that we are seeing some new capacities stepped in, the price is still soft at current stage. Some manufacturers are located in the disaster area of the flood and droughts; electricity power is a concern to run the production normally and in the meantime, the floods may cause delay of the goods delivery.

Taurine

Taurine price is on a stable trend. On one hand, the starting material for taurine, ethylene oxide (EO) is soft in pricing since the beginning of June and on the other hand, after the shuffle process, there are four major producers left in the market.

Vitamin E

Dl-alpha Tocoperyl acetate 50% powder and Oil price increased by 10%. As mentioned in the last report, DNP will bring D-alpha Tocoperyl succinate in stock and it is our expectation that the first shipment will sell out immediately. We still have a limited stock and have arranged a new shipment in July, but the availability is limited.

Xylitol

Feedback from manufacturers is that the price of D-xylose, which is the starting material for xylitol, continues to increase and we forecast that the trend will continue in Q3. Xylitol’s history is still fairly new; we do not have a long term history of pricing on this item. We believe a price increase is unavoidable and surely to occur due to the manufacturers needs but we will control the price at a reasonable level for our customers.

Xylitol DC grade is in very high demand. More and more customers are trying to use this grade directly in their tablet formulations and it tastes great! We have increased import volume in Q3 and if you are looking for a great sweet flavor in your tablets, it is highly recommended to try Xylitol DC.

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