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China is the world's largest API Producer According to the National Bureau of Statistics of China in 2007 API Production reached 2.08 million tons, up 17.12%. 2008 chemical raw output further rapid growth, the growth rate reached 23.06 percent the first five months. Early this year, the main bulk drug raw materials, such as vitamins, citric acid, etc., prices rose in the early stage of rapid increase in production there; in production after the price decline to reach high, we think that high prices will affect demand. API will continue the trend of prices Global commodity bull market is undoubtedly push drug prices continue to rise in raw material catalyst. The production of raw drug materials are mainly chemical products, food, energy, the price of these products in dollars, in the case of the weak dollar, prices of these commodities increased substantially. Bulk drug raw material prices denominated in U.S. dollars because of rising: one is its cyclical characteristics; the other hand is due to rising costs and valuation of currency depreciation. Recalling the 2007-2008 API price movements, with a global edge species, such as penicillin and vitamins of the prices soared. The one hand, these products are mainly obtained through the fermentation of raw materials prices push up prices; together with the state's emphasis on environmental protection to a number of enterprises to gradually withdraw from the market; RMB appreciation is also forcing companies to raise prices to offset its negative impacts; other circulation of the product prices also have helped. Part of the API considerable price range, the terminal market price much higher than the price of our statistics, mainly because these products are "long list" more than the other price of some products there are no pattern of the city, producers of the inventory increase. These products run from the past pattern of view, the general price rise cycle, short cycle of bulk product prices only last 9-12 months. We judge this round part of the API will be extended cycle of rising prices, the main reason for rising raw material costs, RMB appreciation, rising costs of environmental protection, industry and other factors raise barriers to entry. Our large varieties such as early increase of penicillin products, vitamin C, vitamin E, vitamin A, vitamin B5, vitamin B2 and other product prices remain cautious. It is noteworthy that synthetic vitamin raw material intermediates monopoly by foreign companies, the current price along with vitamin prices rise substantially, which makes the cost of synthetic vitamin to increase substantially once the prices fall, product gross margin rate decline very fast. For now most of the bulk drug prices have seen substantial rise in the price of some products hit a new high in recent years, corporate profits increased significantly. Bulk drug prices will not change the nature of cyclical fluctuations API is a typical lower barriers to entry and exit barriers to higher industry. State the importance of environmental protection industry to API entry barriers increase, which will drive industry out of API backward production capacity, improve industrial concentration. While short-term supply-demand balance has been broken, which led directly to product prices. However, we believe that API's cycle had always been there, prices will soon rise too fast down there. Expansion and new capacity for API enterprises is not difficult, once the product profitability substantial new capacity is bound to happen after the new capacity to meet product demand and supply gap in profitability will return to normal levels. We are high quality suppliers, our products such as China mechanical automatic watch , China automatic skeleton watch for oversee buyer. To know more, please visits automatic skeleton watch.
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