Filed Pursuant to Rule 424(b)(3)
                                               Registration No. 333-139752

PROSPECTUS SUPPLEMENT NO. 2,
DATED JULY 5, 2007
(To Prospectus dated January 22, 2007)



                               CHINA DIRECT, INC.
                      5301 North Federal Highway, Suite 120
                                   Boca Raton,
                                  Florida 33487
                                 (561) 989-9171

                        9,546,875 Shares of Common Stock

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         This prospectus supplement supplements the prospectus of China Direct,
Inc. (the "Company") dated January 22, 2007 (the "Prospectus"), and should be
read in conjunction with the Prospectus. This prospectus supplement describes a
temporary reduction of the exercise price of the Company's Class B Warrants as
described hereafter. This prospectus supplement must be delivered with the
Prospectus.

                      TEMPORARY REDUCTION OF EXERCISE PRICE
                               ON CLASS B WARRANTS

         In connection with the Company's 2006 offering of common stock and
Class A and Class B Common Stock Purchase Warrants, the Company issued Class B
Warrants to purchase 3,427,500 shares of common stock exercisable at $10.00 per
share and expiring November 21, 2011. The common shares of the Company
underlying the Class B Warrants are included in the registration statement of
which this Prospectus is a part.

         Commencing at 8:00 AM EDST on July 9, 2007 through and until 4:00 PM
EDST on July 17, 2007 (the "Reduction Offer Window"), the exercise price of the
Class B Warrants will be temporarily reduced from $10.00 per share to an
exercise price of $3.00 per shares as to the first 1,427,500 Class B Warrants
exercised. The Class B Warrants during the Reduction Offer Window may only be
exercised for cash and not on a cashless basis. At the conclusion of the
Reduction Offer Window, or prior thereto if the maximum amount of 1,427,500
Class B Warrants are exercised, the exercise price of the remaining Class B
Warrants will remain at their original exercise price of $10.00 per share. The
Company reserves the right to limit in an equitable manner the exercise of
Class B Warrants by any investor or group of investors as necessary to comply
with the terms of the reduction offer.

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             The date of this Prospectus Supplement is July 5, 2007.