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 highly-regarded core production area of Southern Red Agate in Liangshan, Sichuan, indicate a significant decline in the excavation of high-quality raw stones. This development has led to a sustained tightening of market supply. This shift not only concerns jade collectors and investors but also signals a potential new round of price surges 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. The Liangshan region, as its primary origin, directly influences the global supply landscape of Southern Red Agate. According to sources from the production area, over the past few months, while local mining operations have continued, the output of high-quality, large Southern Red Agate raw stones has sharply decreased. Some mining sites are even facing resource depletion. Data suggests that in the third quarter of this year, the excavation volume of premium Southern Red Agate raw stones in the Liangshan area decreased by approximately 20% to 30% year-on-year, with the decline for top-grade raw stones potentially being even higher.
“The formation of Southern Red Agate requires extremely demanding geological conditions and prolonged geological processes; its resources are inherently non-renewable,” stated Professor Wang (pseudonym) from the Gemology Institute of China University of Geosciences (Wuhan) in an interview with our reporter. “With years of high-intensity mining, the gradual depletion of high-quality veins is an inevitable trend. Most of the high-quality finished products seen in the market now originate from early reserves or a small number of newly excavated 'lucky finds.'” Professor Wang further explained that this resource scarcity is the fundamental driver behind its value appreciation.
In the market, influenced by the reduced supply from the production area, the price of Southern Red Agate raw stones has shown a clear upward trend. According to industry estimates, over the past three months, the acquisition price of ordinary quality Southern Red Agate raw stones in the Liangshan area has increased by approximately 5%-10%, while the price increase for premium raw stones with excellent appearance and suitable size has even reached 15%-20%. The retail market has also reacted swiftly, with several well-known jewelry and jade merchants raising the retail prices of finished Southern Red Agate products. For instance, the price of a perfectly preserved Southern Red Agate carving has generally increased by about 5% in the past month.
“When we go to the production area to source materials now, it's noticeably harder to find good materials, and prices are getting higher and higher,” said Mr. Li, a veteran merchant who has been procuring Southern Red Agate in Liangshan for over a decade. “Many mine owners are not in a hurry to sell now; they are all waiting and watching because they know that good materials will only become scarcer. In the future, the entry barrier for Southern Red Agate collection may further increase.”
Looking ahead, the market prospects for Southern Red Agate remain broadly optimistic. Against the backdrop of increasingly scarce resources, its investment and collection value will continue to stand out. However, the market also faces some challenges. With the reduction of high-quality raw materials, more optimized and treated Southern Red Agate may appear on the market, requiring consumers to be vigilant and careful in identification when purchasing. Simultaneously, the industry calls for strengthening the protection and rational development of Southern Red Agate resources to achieve sustainable development.
Experts advise that for general consumers, when selecting Southern Red Agate, it is advisable to prioritize reputable merchants and request authoritative identification certificates. For investors, the focus should be on perfect pieces with exquisite craftsmanship, as such collectibles have greater potential for value preservation and appreciation in the future market. It is foreseeable that in the near future, the scarcity of Liangshan Southern Red Agate will further push up its market value, making it a shining star in the field of jade collection.