Liangshan Southern Red Agate Raw Material Supply Tightens, Market Prices Poised for Another Round of Increases
Liangshan, Sichuan, October 26, 2023 – Recent observations indicate significant changes in the mining activities of Southern Red Agate in the Liangshan region of Sichuan, one of China's and indeed the world's most crucial production areas for this precious stone. According to an in-depth investigation by our correspondent in the production area, the output of high-quality Southern Red Agate rough stones is continuously decreasing. This directly leads to a tightening of market supply and signals a potential new round of price increases for Southern Red Agate.
Liangshan Southern Red Agate has long been highly sought after by collectors and consumers due to its warm texture, vibrant red color, and scarcity. However, the finite nature of natural resources is becoming increasingly evident. According to local miners and dealers, over the past few months, the quantity of newly mined high-quality Southern Red Agate rough stones, especially those with pure color, free of cracks and impurities, such as “persimmon red” and “cherry red” varieties, has decreased by approximately 20%-30% compared to the same period last year.
“It’s incredibly difficult to find a good-quality large piece now; often, we visit several mining sites and come up empty-handed,” revealed Li Ming (pseudonym), a veteran dealer who has been sourcing Southern Red Agate rough stones in Liangshan for over a decade. “While there are plenty of smaller pieces and scraps, those aren't what the market truly demands.”
This shift in supply structure undoubtedly puts pressure on the entire Southern Red Agate market. Industry insiders estimate that the current circulating inventory of high-quality Southern Red Agate rough stones has decreased by about 15% from its peak. “In the past year, the overall market size for Liangshan Southern Red Agate was approximately 2 to 3 billion RMB, with high-end rough stone transactions accounting for a significant proportion. If the supply of premium raw materials continues to decline, this market size might be affected, but the price per gram will significantly increase due to scarcity,” analyzed Professor Zhang Hua, a senior expert and Ph.D. in Geology from the Gemological Association of China.
Professor Zhang Hua further pointed out that the difficulty and long cycle of Southern Red Agate mining, coupled with the uneven distribution of high-quality mineral veins, are inherent factors contributing to the supply shortage. Additionally, increasingly stringent government regulations on mineral resource extraction and stricter environmental policies in recent years have indirectly impacted mining efficiency and output. He believes that in the foreseeable future, the Southern Red Agate market will exhibit a trend of “reduced quantity, increased price,” with prices for collectible fine pieces experiencing particularly significant increases.
From a market response perspective, some astute merchants have already begun adjusting their inventory strategies, stockpiling high-quality rough stones in anticipation of future price hikes. On some online trading platforms and offline specialized markets, prices for certain exquisite Southern Red Agate pieces have already seen a modest increase of 5%-10%. It is anticipated that as the Chinese New Year approaches and market demand further releases, the magnitude of price increases could become more pronounced.
Looking ahead, the scarcity of Southern Red Agate will further underscore its value. For consumers, now might be a good time to acquire high-quality Southern Red Agate, but vigilance against inferior products in the market is crucial. For the industry, exploring sustainable mining and utilization models while protecting resources will be a significant challenge. Concurrently, with the reduction in premium rough stone supply, fine processing and design innovation for Southern Red Agate will become even more critical to enhance product added value and meet market demands for high quality and uniqueness.