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 primary production areas of Southern Red Agate in Liangshan, Sichuan, indicate a significant shift: the extraction of high-quality raw materials is becoming increasingly challenging, leading to a noticeable decline in output. This has resulted in a tightening of market supply. Industry experts widely believe that this development signals a potential new round of price increases for Southern Red Agate, particularly for high-end exquisite pieces, in the short term.
Southern Red Agate, celebrated for its warm texture, vibrant red hues, and profound historical and cultural significance, has garnered a prominent position in the jade and gemstone markets both in China and globally in recent years. The Liangshan region, as its core origin, sees its mining dynamics directly influence the supply-demand balance and price trends of the entire industry.
According to sources within local mining areas, the yield of high-quality Southern Red Agate rough stones from several major mining points in Liangshan has decreased over the past few months. A mine owner, who wished to remain anonymous, stated: “It’s much harder now to unearth a piece of Southern Red Agate rough with excellent appearance and suitable size than before. We’ve invested more human and material resources, but the output is not meeting expectations.” This phenomenon is not isolated but is prevalent across various Southern Red Agate mining zones in Liangshan.
Market data reveals that since the second quarter of this year, the average transaction price of Liangshan Southern Red Agate rough stones has shown a slight upward trend. According to preliminary statistics from the Gemological Association of China (GAC), the average price of high-quality Southern Red Agate rough stones has increased by approximately 5% to 8% in the past three months. For some top-grade “Persimmon Red” or “Brocade Red” rough stones, the increase has been even higher, reaching over 10%. This aligns perfectly with the trend of decreasing market supply.
Professor Li Ming, a senior jade appraisal expert and faculty member at the Gemological Institute of China University of Geosciences (Beijing), commented on the situation: “The formation of Southern Red Agate requires a long geological process, and the distribution of its high-quality mineral veins is inherently rare. After years of intensive mining, shallow high-quality mineral sources are gradually depleting, and the cost and difficulty of deep mining are increasing. The current reduction in high-quality raw material output from the Liangshan production area is a manifestation of natural resource scarcity and an inevitable outcome of market dynamics.” Professor Li further pointed out that this supply-side pressure will inevitably be passed on to the end market, driving up finished product prices.
For downstream processing and sales enterprises, the rising cost of raw materials undoubtedly presents a significant challenge. Many businesses have begun to adjust their procurement strategies, increasing the utilization of existing inventory, and actively seeking new cooperative channels to secure raw material supply. However, in the face of an overall tightening supply, alleviating cost pressure in the short term will not be easy.
Looking ahead, the Southern Red Agate market is expected to exhibit a two-tiered trend. On one hand, high-quality, rare Southern Red Agate, due to its collection value and investment attributes, will see prices remain strong, potentially even experiencing exponential growth. On the other hand, ordinary quality Southern Red Agate, under cost pressure, may see relatively moderate price increases, but will generally maintain an upward trajectory.
Industry analyst Wang Qiang believes: “The value of Southern Red Agate lies not only in its physical properties but also in its cultural connotations and scarcity. As high-quality resources become increasingly scarce, the investment attributes of Southern Red Agate will be further highlighted in the future. For consumers, now is a good time to invest in or collect high-quality Southern Red Agate, as future acquisition costs may be higher.”
The recent tightening of high-quality raw material supply in the Liangshan production area has undoubtedly introduced new variables into the Southern Red Agate market. How to ensure the sustainable development of resources while meeting growing market demand will be a crucial challenge for the entire industry. Simultaneously, this also reminds consumers and investors that when purchasing Southern Red Agate, they should pay more attention to its quality, origin traceability, and authoritative appraisal to ensure its value and investment return.