Mount Liangshan Southern Red Agate Market Faces Upward Price Pressure Amid Intensifying Supply-Demand Imbalance
Liangshan, Sichuan, October 26, 2023 – Recent developments in the core Southern Red Agate (Nan Hong Agate) producing region of Liangshan, Sichuan, indicate significant shifts in raw material extraction. According to in-depth field investigations by our reporters and cross-referenced information, the output of high-quality Nan Hong Agate rough stones is experiencing a continuous decline. This trend is gradually impacting downstream markets, leading to tighter supply and signaling a potential structural price increase in the near future.
Nan Hong Agate, cherished for its warm texture, vibrant red hues, and unique historical and cultural significance, has long been favored by collectors and consumers. As a primary source, Liangshan's mining dynamics directly influence the global Nan Hong Agate market. However, in recent years, the gradual depletion of high-grade veins and increasing mining difficulties have exacerbated the bottleneck in raw material supply.
“We have observed that the average monthly output of high-quality Nan Hong rough stones in the Liangshan region has decreased by approximately 15% to 20% year-on-year over the past year,” stated Dr. Li Ming, a senior researcher at the China Gem & Jade Association, in an interview with our newspaper. “Particularly, the scarcity of collector-grade varieties like 'Persimmon Red' and 'Brocade Red' is accelerating at an even faster pace. This decline is not a short-term fluctuation but a long-term trend driven by resource limitations.”
Market data indicates that, influenced by reduced supply from the origin, the bargaining power in the primary market (rough stone trading) has significantly diminished recently. The average transaction price for high-quality rough stones, priced by weight, has cumulatively risen by about 8% to 12% over the past three months. Some rare varieties have seen even higher increases. Industry insiders generally believe that this upward trend will soon propagate to the secondary market (finished product trading).
“Currently, the procurement costs for some exquisite Nan Hong bracelets and carvings in our store have already increased. However, to maintain market competitiveness, we are temporarily absorbing a portion of these costs,” revealed Mr. Zhang Hua, head of a renowned jade merchant in Chengdu. “But if the supply from the origin remains tight, we will have no choice but to adjust retail prices. We anticipate that retail prices for high-end Nan Hong finished products could see an increase of 5% to 15% within the next six months.”
Beyond resource depletion, rising extraction costs are another significant factor contributing to price increases. As mining depths increase, higher technical requirements, greater safety investments, and stricter environmental regulations are imposed. All these directly elevate the production cost of rough stones. Furthermore, some regions have restricted and regulated disorderly mining to protect the ecological environment, further impacting market supply.
Looking ahead, the Nan Hong Agate market is expected to exhibit a polarized trend. On one hand, high-quality, rare Nan Hong Agate will continue to appreciate in value due to its non-renewable nature and unique collection value, becoming a hot spot for investment and collection. On the other hand, the market for ordinary quality Nan Hong Agate may stabilize or even be impacted to some extent by counterfeits and substitutes.
Dr. Li Ming advises consumers and investors to remain rational and make prudent choices in the current market environment. He emphasized: “For Nan Hong Agate investments, greater attention should be paid to its quality, origin traceability, and craftsmanship value. Blindly chasing price increases or purchasing products of unknown origin carries significant risks. Simultaneously, the industry should strengthen self-regulation and promote standardization to ensure healthy market development.”
The changes in mining dynamics in the Liangshan region undoubtedly present new challenges and opportunities for the Nan Hong Agate market. How to achieve sustainable industrial development and enhance product added value in the context of limited resources will be a crucial task for all industry participants.