Liang Shan Southern Red Agate Raw Material Supply Tightens, Market Prices Poised for New Surge
Liang Shan, Sichuan, October 26, 2023 – Recent reports from Liang Shan, Sichuan, a primary production area for Southern Red Agate in China, indicate a continuous decline in the output of high-quality raw materials. This development has not only raised concerns within the industry regarding future market supply but also signals a potential new round of price increases for Southern Red Agate.
As one of the most crucial Southern Red Agate producing regions globally, the supply status from Liang Shan directly influences the global market trend. According to local mining observers and jade merchants, the discovery rate of high-quality, large-sized Southern Red Agate in mining areas has significantly decreased over the past few months. A mine owner, who preferred to remain anonymous, stated: “It’s now more than twice as difficult to find a good piece of old material than before. Many mines are nearing depletion, and new veins are becoming scarcer.”
Structural Changes in Supply and Market Ripple Effects
This structural change in raw material supply is rapidly propagating through all segments of the industry chain. According to the latest data released by the Gemological Association of China (GAC), the average transaction price of Southern Red Agate rough stones increased by approximately 8% quarter-over-quarter in the third quarter of this year. Prices for high-quality, fine materials saw an even greater increase, exceeding 15%. It is anticipated that by the end of this year, overall market prices may continue to climb by another 5%-10%.
Dr. Li Ming, a senior jade appraiser and visiting professor at the Gemological Institute of China University of Geosciences (Wuhan), commented in an interview with our newspaper: “The formation of Southern Red Agate requires a long geological process, and its resources are non-renewable. After years of intensive mining in the Liang Shan region, the depletion of high-quality veins is an inevitable trend. The current reduction in premium raw materials reflects an increasingly acute imbalance between market supply and demand. In the future, the collection and investment value of Southern Red Agate will become even more prominent.”
Market Outlook and Response Strategies
In response to the tightening supply of raw materials, Southern Red Agate processing enterprises and dealers are actively adjusting their strategies. Some companies are increasing their efforts to integrate and optimize existing inventory, enhancing processing techniques to boost product added value. Simultaneously, other merchants are looking towards broader international markets for new raw material sources, although no substitutes comparable in quality to Liang Shan Southern Red Agate have yet emerged.
For consumers and investors, the current market environment implies that the entry barrier for Southern Red Agate may further increase. Dr. Li Ming advises: “In the context of increasingly scarce raw materials, when purchasing Southern Red Agate, one should pay more attention to its quality, craftsmanship, and rarity. Fine Southern Red Agate with unique textures, warm luster, and rich colors will have greater potential for value preservation and appreciation. At the same time, one must also be vigilant against inferior or artificially enhanced products that may appear in the market.”
In the long run, with further resource depletion and sustained market demand, the market price of Southern Red Agate is expected to remain high. The industry calls for strengthened scientific planning and rational exploitation of mineral resources, while also promoting the inheritance and innovation of Southern Red Agate culture to achieve sustainable development of the industry.
This latest development regarding raw material supply in the Liang Shan Southern Red Agate production area undoubtedly serves as a wake-up call for the entire jade industry, bringing both new challenges and opportunities for the future development of the Southern Red Agate market.