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Jadeite prices likely to drop

(Global Times)
Updated: 2011-06-01 14:32
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The prices of jadeite have increased fivefold over the past year in China, but experts have warned that the jade bonanza might not last long.


Figures from the Gems and Jewelry Trade Association of China show that average prices of jadeite increased by 18 percent per year between 2000 and 2009, but that they began to rise much more quickly last year.


"The prices of jadeite began to soar since May last year," Yang Muren, CEO of jaadee.com, a Yunnan-based jadeite retail website, told the Global Times on Monday. "I recently sold a piece of jadeite for 5 million yuan ($771,235), and it was just around 2 million yuan last year."


"Prices of high-quality jadeite, pieces valued above 20,000 yuan, have risen by four to five times in the past 12 months," he said. "Even low-quality jadeite prices have doubled or tripled."


The surging jadeite prices have boosted investors' enthusiasm. Yang says his online sales revenue amounted to 15 million yuan last year, and most buyers were individual collectors. "The jadeite with prices ranging from 3,000 yuan to 100,000 yuan sells well," he added.


Experts attribute the soaring prices to the increase in raw material prices, as well as domestic inflation and speculation.


"Jadeite is a limited resource that only exists in Myanmar, and the prices of rough stones have greatly increased," said Wan Jun, president of WanRuiXiang Jadeite Club in Beijing.


"A 30-kilogram piece of rough jadeite with a starting bidding price of 20,000 euros ($28,570) was finally auctioned for 239,999 euros in April."


Shi Hongyue, deputy secretary general of the Gems and Jewelry Trade Association of China, admits there is some speculation in the rough jade stone market.


"We encourage personal investment in the jade sector but hope that not too much money will swarm into buying raw materials," he said. "It will cause damage to the industry and hurt most jade processing companies."


Yang estimates that the soaring jadeite prices might not last long as China is set to tighten its monetary policy. "High-end jadeite is likely to maintain its current prices, but prices for low-end jadeite might drop in the future," he said.


Wan pointed out that cashing in on jadeite is not so easy. "People used to bring jadeite to pawnshops, but they can't get high prices there," she said. "The jadeite auction business is still small in China due to the lack of professionals, but it has development potential."

 

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