Lian Shan South Red Agate Raw Material Supply Tightens, Market Prices Poised for New Surge
Lian Shan, Sichuan, October 26, 2023 – Recent reports from the highly acclaimed Lian Shan South Red Agate mining region in Sichuan indicate a significant decline in the extraction of high-quality raw stones, leading to persistent market supply shortages. This development not only concerns jade collectors and investors but also signals a potential new round of price increases for South Red Agate in the market.
South Red Agate, with its warm texture, rich red color, and unique historical and cultural value, has long held a significant position in the Chinese jade market. Among them, Lian Shan South Red is considered a premium variety due to its vibrant color, strong gelatinous feel, and fewer fissures. However, the finite nature of natural resources and the cumulative effects of over-mining are gradually showing their impact on the market.
According to sources from the production area, the yield of high-quality South Red Agate raw stones from Lian Shan's core mining areas has significantly decreased over the past few months. An anonymous mine owner stated, “It’s now more than twice as difficult to find a piece of high-grade material compared to before. Many mines are nearing exhaustion, and newly discovered veins mostly yield materials of average quality.” This phenomenon, to some extent, reflects the increasing scarcity of South Red Agate resources.
Market data indicates that the overall market size of South Red Agate has continuously expanded in recent years. According to a report by the Gems & Jewelry Trade Association of China, the total output value of the Chinese jade market is estimated to reach approximately 120 billion RMB in 2022. As an emerging popular category, South Red Agate's market share has increased year by year, estimated to account for about 5% to 8% of the market, or 6 to 9.6 billion RMB. However, with the reduction of high-quality raw materials, this growth momentum may face challenges.
Professor Li Ming (pseudonym) from the School of Gemology at China University of Geosciences (Beijing) noted in an interview with our newspaper: “The formation of South Red Agate requires specific geological conditions and a long geological age; its resources are non-renewable. After years of high-intensity mining in the Lian Shan area, the depletion of high-quality resources is an inevitable trend. The current tight supply of high-quality raw materials is the most direct market response to resource scarcity. It is expected that within the next year, the price of Lian Shan South Red Agate may increase by 15% to 30%, especially for high-grade, larger pieces, where the increase could be even higher.”
This raw material supply crunch will have a profound impact on the South Red Agate industry chain. For downstream processing enterprises, the cost of acquiring high-quality raw stones will significantly increase, which will undoubtedly be passed on to retail prices. At the same time, this may prompt some businesses to turn to South Red Agate from other origins or seek substitutes, but the unique charm of Lian Shan South Red remains difficult to fully replace.
In the long run, the scarcity of South Red Agate resources will further enhance its collection and investment value. Industry experts suggest that consumers and investors, in the current market environment, should pay more attention to the quality, origin traceability, and craftsmanship of South Red Agate. Concurrently, relevant departments should strengthen the scientific management and protection of mineral resources to promote the sustainable development of the South Red Agate industry and avoid irreversible damage to the ecological environment due to over-mining.
These latest developments from the Lian Shan South Red Agate mining region undoubtedly serve as a wake-up call for the entire jade market. Against the backdrop of increasingly scarce resources, how to balance market demand with resource protection will be a critical issue for the South Red Agate industry in the future.