Liangshan Southern Red Agate Raw Material Supply Tightens, Market Prices Poised for New Round of Increases

Liangshan Southern Red Agate Raw Material Supply Tightens, Market Prices Poised for New Round of Increases

Liangshan, Sichuan, October 26, 2023 – Recent reports from the highly-regarded Liangshan Southern Red Agate production area in Sichuan indicate a significant decline in the output of high-quality raw materials from its core mining zones. This development has led to a persistent tightening of market supply, drawing widespread attention from industry insiders and signaling a potential new round of price increases for Southern Red Agate.

Southern Red Agate, with its warm texture, vibrant red hues, and inherent scarcity, has long held a pivotal position in China's jade market. Liangshan, as one of its most crucial origins, directly influences the global supply and pricing of this precious stone.

According to an in-depth investigation by our reporter in the production area, the difficulty of mining at several major Southern Red Agate sites in Liangshan has notably increased over the past few months. On one hand, surface deposits have been largely depleted after years of extraction, forcing miners to delve deeper underground. This not only escalates mining costs but also reduces efficiency. On the other hand, the complex geological conditions make the discovery of high-quality rough stones more sporadic and rare. Some mine owners revealed that the output rate of premium rough stones has decreased by approximately 20% to 30% compared to the same period last year, with some mining areas experiencing even greater declines.

“It’s much harder to find a good quality Southern Red Agate rough now than before,” stated Mr. Wang, a veteran miner and trader with nearly two decades of experience in Liangshan, to our reporter. “Previously, we might find several fine pieces in a few days of digging. Now, it might take ten to fifteen days to barely come across one that’s decent. Labor costs and machinery wear and tear are increasing, but output is decreasing, directly leading to higher raw material prices.”

Market data indicates that, influenced by the reduced supply from the origin, the wholesale prices of Southern Red Agate rough stones have shown a steady upward trend recently. According to incomplete statistics, the average price of mid-to-high-end Southern Red Agate roughs has risen by about 10% to 15% in the past three months, while exceptionally fine, collector-grade roughs have seen increases exceeding 20%.

Addressing this market trend, Professor Li Ming, Vice President of the China Jewelry and Jade Industry Association and a renowned jade appraisal expert, commented in an interview with our newspaper: “The scarcity of Southern Red Agate is the core support for its value. The reduction in high-quality raw material output from the Liangshan production area is an inevitable trend, as mineral resources are not infinite. The current market reaction is the most direct reflection of supply and demand. It is anticipated that Southern Red Agate market prices will continue their upward momentum in the foreseeable future, especially for those exquisite pieces with pure color, delicate texture, and no cracks or impurities, whose value preservation and appreciation potential will be even more prominent.”

Professor Li further analyzed that as consumers’ understanding of Southern Red Agate’s cultural and investment value continues to grow, market demand remains robust even with rising prices. He advised ordinary consumers to prioritize quality and authenticity when purchasing Southern Red Agate, choosing reputable vendors. For investors, he suggested focusing on high-end products with unique artistic value and scarcity.

Looking ahead, the Liangshan Southern Red Agate production area will face greater challenges. Increasingly stringent environmental policies and the non-renewable nature of mineral resources will further restrict output. It is foreseeable that in the near future, the “rarity commands value” attribute of Southern Red Agate will become even more pronounced, and its market value will continue to climb. This also prompts the industry to consider how to enhance the overall value of Southern Red Agate through fine processing, brand building, and cultural promotion, while simultaneously protecting resources to achieve sustainable development.