Mount Liangshan Southern Red Agate Supply-Demand Imbalance Intensifies, Market Prices Face Upward Pressure
Liangshan, Sichuan, October 26, 2023 – Recent mining activities in the Liangshan region of Sichuan, a major production area for Southern Red Agate in China, have shown significant changes. According to in-depth investigations by our reporters in the production area and confirmed by multiple sources, the output of high-quality Southern Red Agate raw materials is continuously shrinking. This not only leads to an increasingly tight market supply but also signals a potential new round of price increases for Southern Red Agate.
For a long time, Liangshan Southern Red Agate has been highly favored by collectors and consumers for its warm texture, vibrant color, and unique gelatinous feel. However, after years of intensive mining, surface and shallow deposits have gradually been depleted, while the difficulty and cost of deep mining have significantly increased. A mine owner, who wished to remain anonymous, revealed, “Finding a piece of raw stone with excellent quality and suitable size is now ten times harder than a few years ago. Many old mining areas have been largely exhausted, and the investment in exploration and mining of new sites is huge, but the output is far below expectations.”
Scarcity of High-Quality Raw Materials Poses Severe Challenges to Market Supply
Data indicates that over the past five years, the annual average output of Southern Red Agate raw stones in the Liangshan region has dropped from a peak of approximately 300 tons to less than 100 tons currently. Among these, the proportion of high-quality raw stones reaching collection grade is less than 5%. This drastic decline has directly led to a severe shortage of high-quality raw materials for downstream processing enterprises and the end market. Industry insiders estimate that the current stock of high-quality Southern Red Agate finished products circulating in the market is insufficient to meet market demand for the next two years.
“Raw materials are the source of the Southern Red Agate industry chain. Once the source has problems, the entire chain will be affected,” pointed out Professor Zhang Deming, a member of the expert committee of the Gems & Jewelry Trade Association of China and a renowned jade appraiser, in an interview with our newspaper. “The scarcity of Liangshan Southern Red is accelerating. In the past, some lower-quality Southern Red could still find a market, but now, even raw stones of average quality are in high demand due to tight supply. This reflects that the overall market demand for Southern Red Agate remains strong, but the supply side cannot match it.”
Strong Price Increase Expectations, Highlighting Investment and Collection Value
Driven by tight supply, the market price of Southern Red Agate has already begun to show an upward trend. According to market monitoring data, the average price of high-quality Liangshan Southern Red Agate raw stones has increased by approximately 15%-20% over the past six months, with some rare premium pieces rising by over 30%. The finished product market has also fluctuated accordingly, especially those Southern Red works with exquisite carving and perfect appearance, whose auction prices have repeatedly hit new highs.
“From an economic perspective, when scarcity coexists with high demand, price increases are an inevitable trend,” Professor Zhang Deming further analyzed. “For investors and collectors, now might be a window period to re-evaluate the value of Southern Red Agate. With further resource depletion and continuous increases in mining costs, the investment and collection value of Southern Red Agate will become even more prominent.”
Industry Calls for Rational Mining and Sustainable Development
Facing the increasingly severe resource situation, the industry has also begun to reflect. Experts have called for strengthening scientific exploration and planning of Southern Red Agate mining areas to avoid over-exploitation and resource waste. At the same time, processing enterprises are encouraged to innovate in design and craftsmanship to enhance the added value of Southern Red Agate, creating greater market value with fewer raw materials. Furthermore, promoting the cultural connotations and artistic value of Southern Red Agate and cultivating consumers' appreciation for high-quality Southern Red are also important directions for promoting the healthy development of the industry.
Looking ahead, the market landscape of Liangshan Southern Red Agate will inevitably change. Against the backdrop of increasingly scarce high-quality raw materials, how to balance mining, processing, and market demand will be a crucial challenge for all practitioners. It is foreseeable that with continued tight supply, the market price of Southern Red Agate will remain strong, and its status as a rare and precious jade will be further consolidated.