Liangshan Southern Red Agate: Premium Raw Material Supply Tightens, Market Prices Face New Upward Pressure
Liangshan, Sichuan, October 26, 2023 – The upstream mining activities in the Liangshan Southern Red Agate production area, a focal point of China's jade market, are undergoing significant changes. According to in-depth field research by our reporter and various aggregated information, the output of premium Southern Red Agate raw materials in the Liangshan region is continuously declining. This trend has begun to profoundly impact the overall market supply structure and signals the potential arrival of a new price increase cycle.
For a long time, Liangshan Southern Red Agate has enjoyed a high reputation among domestic and international jade enthusiasts and collectors for its warm texture, vibrant red color, and unique gelatinous feel. However, the finite nature of natural resources is becoming increasingly apparent. According to local miners, the difficulty of extracting shallow, high-quality veins has increased significantly in recent years, while the exploration and mining costs for deeper deposits have grown exponentially. A veteran mine owner, who wished to remain anonymous, told our reporter, “Finding a piece of Southern Red Agate with excellent appearance and suitable size is now more than twice as difficult as before. Many mines are nearing depletion, and newly discovered deposits often yield only average quality material.”
Market data indicates that the transaction prices of premium Liangshan Southern Red Agate rough stones have cumulatively risen by approximately 15% to 20% over the past year. Since the beginning of this quarter, the increase for some top-tier materials has even exceeded 30%. According to statistics from the Gemological Association of China (GAC), the total transaction value of the Chinese Southern Red Agate market in 2022 was approximately 8 billion RMB, with Liangshan Southern Red accounting for about 60% of this market share. Industry insiders generally expect that with the continuous tightening of premium raw material supply, the overall market price of Liangshan Southern Red Agate is likely to reach new highs in late 2023 to 2024, with an anticipated increase of 20% to 40%, especially in the high-end collectible product segment.
“This is not just a short-term supply-demand imbalance, but rather the manifestation of a long-term trend of resource depletion,” stated Dr. Li Mingde, a renowned jade appraisal expert and visiting professor at the Gemological Institute of China University of Geosciences (Beijing), in an interview with our newspaper. “The formation of Southern Red Agate requires extremely long geological ages and specific geological conditions; its regenerability is almost zero. With the early large-scale, extensive mining, premium resources have been largely exhausted. The current market situation is a re-evaluation of this scarcity value.”
Facing the challenge of raw material supply, enterprises across the Southern Red Agate industry chain are actively seeking countermeasures. Some businesses are turning to optimizing design and craftsmanship to enhance the added value of ordinary materials through meticulous carving; others are looking towards the existing stock market and international markets, seeking new sources of goods or expanding sales channels. However, for the fine and collectible Southern Red Agate market, which heavily relies on premium raw materials, finding substitutes or large-scale expansion is almost impossible.
Looking ahead, the Liangshan Southern Red Agate market will exhibit a trend of polarization. On one hand, the price of ordinary quality Southern Red Agate may remain relatively stable, or even experience minor fluctuations at certain times; on the other hand, top-tier Southern Red Agate with excellent appearance, larger size, and pure color will see its scarcity further highlighted, with prices continuing to rise, making it a popular target for investment and collection. For consumers, in the current market environment, it is even more important to pay attention to the quality, craftsmanship, and origin when purchasing Southern Red Agate, avoiding blind following and investing rationally.
The recent changes in mining dynamics in the Liangshan Southern Red Agate production area once again sound an alarm for the entire jade industry: the finite nature of natural resources is an irreversible trend. How to meet market demand while protecting resources and ensuring sustainable development will be a long-term challenge for the industry's future development.