Liangshan Southern Red Agate: Premium Raw Material Supply Tightens, Market Faces Structural Adjustment
Liangshan, Sichuan, October 26, 2023 — Recent developments in the mining of premium raw materials for Southern Red Agate in Liangshan, Sichuan, a core production area for this highly sought-after gemstone in China, are drawing significant attention across the industry. According to in-depth field research by our reporter and various consolidated sources, the output of high-quality Southern Red Agate raw materials in the Liangshan region is showing a notable decline. This trend indicates a profound structural adjustment in the market supply, which is expected to have a far-reaching impact on future market prices and the overall industry ecosystem of Southern Red Agate.
Over the past decade, Southern Red Agate has rapidly emerged in the Chinese jewelry and jade market due to its unique warm texture and vibrant colors, becoming a hot spot for collection and investment. Liangshan Southern Red, renowned for its high quality, substantial weight, and rich color palette, once dominated the market. However, prolonged intensive mining has led to the near depletion of high-quality surface and shallow-layer mineral veins. According to local mining sources in Liangshan, the proportion of newly mined Southern Red Agate raw materials that can be classified as collectible or premium grade has fallen from a peak of approximately 15%-20% to less than 5%. In some mining sites, this proportion is even lower.
“The scarcity of premium raw materials is becoming increasingly prominent,” stated Professor Zhang Hua, a member of the expert committee of the China Gems & Jewelry Trade Association and a senior jade connoisseur, in an interview with our newspaper. “This is not merely a short-term fluctuation but rather the result of a long-term interplay between resource endowment and market demand. As mining depth increases, extraction costs rise sharply, while the difficulty of discovering high-quality ore multiplies. We anticipate that within the next two years, the overall market supply of Liangshan Southern Red Agate will remain stable or even slightly decrease, but the supply gap for high-end premium raw materials will widen further, with price increases potentially reaching 15%-25%.”
Market data indicates that the total transaction volume of Southern Red Agate has continuously grown in recent years, surpassing the 10 billion RMB mark in 2022, with Liangshan Southern Red contributing over 60% of the market share. However, behind this overall growth lies the rapid appreciation of premium materials. For instance, the market price for persimmon red or brocade red materials of comparable quality and weight has generally increased by over 10% in the past year. The news of reduced premium raw material output will undoubtedly further push up the prices of such high-end products.
This shift in supply structure will compel the Southern Red Agate industry to undergo a deep transformation. On one hand, merchants and collectors will increasingly value existing high-quality finished products, potentially leading to increased reluctance to sell. On the other hand, the industry will dedicate more effort to optimizing the utilization of mid-to-low-grade raw materials, for example, by enhancing their added value through more exquisite carving techniques, creative designs, or combinations with other materials like K-gold and diamonds. Furthermore, attention to other production areas, such as Baoshan Southern Red Agate, may also increase in an attempt to fill some market gaps.
Looking ahead, the Liangshan Southern Red Agate market is expected to exhibit a bifurcated trend: high-end premium materials will continue to appreciate in value due to their scarcity, becoming hard currency for investment and collection; while ordinary materials will increasingly rely on design and craftsmanship innovation to win market share. For consumers, this means that purchasing high-quality Southern Red Agate will require a higher budget and more professional connoisseurship. For the industry, how to achieve sustainable development amidst limited resources will be a significant challenge for all practitioners.