Lian Shan Southern Red Agate Raw Material Supply Tightens, Market Prices Poised for Another Surge
Liangshan, Sichuan, October 26, 2023 – Recent developments in the primary mining areas of Southern Red Agate in Liangshan, Sichuan, a region closely watched by the jade collecting community, indicate significant shifts in raw material extraction. First-hand information obtained by our reporter from the production sites reveals a continuous decline in the output of high-quality Southern Red Agate rough stones. This directly leads to a tightening of market supply and signals a potential new round of price increases for Southern Red Agate.
Southern Red Agate, with its warm texture, vibrant red color, and scarcity, has long held a crucial position in the Chinese jade market. As its core production area, the mining situation in the Liangshan region has a pivotal impact on the entire Southern Red market. In past years, with the rise of Southern Red Agate collecting fervor, over-extraction was once prevalent. However, in recent years, with increasingly stringent mineral resource management policies and the gradual depletion of high-quality veins, both the difficulty and cost of mining Liangshan Southern Red have significantly increased.
“We have observed that since the beginning of this year, the quantity and integrity of newly extracted high-quality Southern Red rough stones in the Liangshan area have decreased by at least 20% compared to the same period last year,” stated Professor Wang Deming, Vice President of the China Gem & Jade Association and a senior jade appraiser, in an interview with our newspaper. “Especially those exquisite pieces reaching persimmon red or brocade red grades are becoming exceedingly rare. This is not accidental but rather a manifestation of the cumulative effects of long-term mining.”
Market data indicates that due to the reduced supply from the production areas, transaction prices for Southern Red Agate rough stones have recently shown a slight increase. According to a veteran Southern Red dealer at Beijing's Panjiayuan Antique Market, prices for rough stones of comparable quality have risen by an average of 5% to 8% in the past month. For exquisite rough stones with excellent appearance and larger sizes, the increase has even exceeded 15%.
“It’s becoming increasingly difficult for us to acquire goods, especially top-grade materials specifically requested by some old clients; often, they are available at a price but not in the market,” confessed Ms. Li, head of a well-known jade studio in Chengdu. “Previously, we could find suitable pieces by visiting several mining sites, but now most sites are not yielding good materials, or they are not releasing goods at all, hoarding them instead.”
This tight supply situation is not only evident in the rough stone market but is also gradually transmitting to the finished product market. Industry insiders generally believe that with the continuous rise in raw material costs, the retail prices of finished Southern Red Agate products will inevitably increase. It is anticipated that within the next six months, the market prices for mid-to-high-end Southern Red Agate finished products will have a 10% to 20% upward potential.
In addition to resource depletion, stricter environmental policies have also impacted Southern Red Agate mining. To protect the ecological environment, local governments have become more cautious in managing mining areas and issuing mining permits. This undoubtedly further restricts the development of new veins and the scale of existing vein extraction.
Looking ahead, the Southern Red Agate market will exhibit a polarization trend. On one hand, due to the scarcity of high-quality raw materials, the collection and investment value of premium Southern Red Agate will be further highlighted, with prices expected to continue to climb, becoming a new favorite in the high-end collectible market. On the other hand, for ordinary quality Southern Red Agate, its price may remain relatively stable or even be impacted to some extent amidst increasingly fierce market competition.
For consumers and investors, the current period is crucial for cautious evaluation and rational entry. Experts suggest that when purchasing Southern Red Agate, one should pay more attention to its quality, origin traceability, and craftsmanship, avoiding blind following. Meanwhile, for industry practitioners, how to enhance the added value of Southern Red Agate through exquisite carving techniques and innovative design concepts amidst raw material scarcity will be the core competitiveness for future development.
The changes in raw material supply in the Liangshan Southern Red Agate production area undoubtedly bring new challenges and opportunities to the entire Southern Red Agate market. How to achieve sustainable development under limited resources will be an important topic for all Southern Red Agate practitioners.