Liangshan Southern Red Agate Region Faces Supply-Demand Imbalance, Market Prices Expected to Continue Rising
Liangshan, Sichuan, October 26, 2023 – Recent reports from the primary production area of Liangshan Southern Red Agate in Sichuan indicate a significant decline in the output of high-quality raw materials. This development is profoundly impacting the global Southern Red Agate market, signaling a potential new upward cycle for prices.
Southern Red Agate, cherished for its warm texture and vibrant red hue, has long been a favorite among collectors and consumers. Liangshan, as its core origin, directly influences the supply status of raw materials for the entire industry. According to our reporter's in-depth investigation in the mining area, over the past few months, the difficulty of extracting high-quality Southern Red Agate rough stones has increased significantly, with the yield rate continuously decreasing. Several mine owners stated that as shallow veins are gradually depleted, the cost of deep mining has risen sharply, and the probability of discovering high-quality ore is far lower than in previous years.
“Our output of high-quality rough stones in the first half of this year decreased by at least 20% compared to the same period last year,” revealed a Liangshan mining executive who wished to remain anonymous. “It's incredibly challenging now to find a rough stone of excellent quality and substantial weight. This has directly led to a sharp reduction in the number of premium products we supply to the market.”
Market data corroborates this trend. According to preliminary statistics from the Gemological Association of China (GAC), the average transaction price of high-quality Liangshan Southern Red Agate rough stones increased by approximately 8%-12% quarter-on-quarter in Q3 2023. It is projected that by year-end, this cumulative increase could reach 15%-20% or even higher, especially for collectible-grade premium materials, which exhibit greater price elasticity.
Professor Li Ming, a senior jade appraisal expert and special consultant to the Chinese Jade Culture Research Association, pointed out: “The scarcity of Southern Red Agate resources is fundamental to its value. The tight supply of high-quality raw materials from the Liangshan production area is a result of natural market regulation. As mining depth increases, geological conditions become more complex, and extraction costs inevitably rise. Simultaneously, market demand for high-quality Southern Red Agate remains robust, particularly among China's middle class and high-net-worth individuals, whose enthusiasm for investing in traditional cultural artifacts continues unabated. This will undoubtedly further drive up market prices.”
Professor Li further analyzed that this supply-demand imbalance is not a short-term phenomenon. He predicts that over the next 3-5 years, the supply of high-quality raw materials for Liangshan Southern Red Agate will continue to tighten, and prices will show a steady upward trend. He advises consumers and investors, in the current market environment, to pay more attention to the quality, craftsmanship, and origin of Southern Red Agate, and to be wary of inferior and counterfeit products in the market.
Facing raw material shortages, downstream processing enterprises are also encountering severe challenges. Some small processing plants are facing dual pressures of rising production costs and reduced orders due to difficulty in obtaining stable and high-quality raw material supplies. However, this has also prompted some large brand enterprises to seek diversified procurement channels and increase refined processing and design innovation for existing raw materials to enhance product added value.
Looking ahead, the Liangshan Southern Red Agate market will enter a phase that further tests insight and strength. For collectors, now may be a good time to acquire premium Southern Red Agate; for industry participants, how to achieve sustainable development through innovation and brand building amidst increasingly scarce resources will be a crucial challenge. The “Red Legend” of Southern Red Agate, precisely because of its rarity, is becoming even more precious.
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