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LONDON — A global deficit of platinum

in 2023 will be 77% larger than previously expected due to

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supply constraints and higher demand, the World Platinum

Investment Council (WPIC) said in a quarterly report on Monday.

Demand for platinum, used in vehicle exhausts, industry and

jewelry, is expected to grow by 28% in 2023 to 8.2 million

troy ounces, the WPIC said.

The use of more metal per vehicle, and substitution by auto

makers of palladium for cheaper platinum, is

driving the increase. Both metals neutralize harmful engine

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emissions.

Industrial demand is expected to rise to record levels, the

WPIC said, thanks largely to an expansion in China of

glassmaking facilities which require platinum.

Supply, meanwhile, is expected to fall by 1% to 7.2 million

ounces, partly due to electricity shortages in major producer

South Africa.

That will leave the market undersupplied by 983,000

ounces, said the WPIC, having only two months ago predicted a

deficit of 556,000 troy ounces this year.

“The market will need to rely upon above-ground stocks to

meet the shortfall, but…it is not clear how freely available

they are likely to be at current prices, particularly as a

sizeable portion of above-ground stocks appear to be held in

China,” it said.

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The platinum market was already undersupplied in the first

three months of 2023 – the first quarterly deficit since the

second quarter of 2021, the WPIC said.

Demand jumped by 28% in the first quarter as investors

bought bars and coins as a safe store of value amid global

economic uncertainty or as a speculative bet that deficits will

push platinum prices higher.

PLATINUM SUPPLY/DEMAND (‘000 oz)*

2022 2023f 23f/22 Q1 Q4 Q1

change 2022 2022 2023

%

SUPPLY

Refined 5,522 5,511 0% 1,273 1,329 1,178

Production:

South Africa 3,915 3,873 -1% 878 931 759

Zimbabwe 480 502 5% 117 123 121

North America 263 284 8% 66 65 69

Russia 663 647 -2% 163 160 180

Other 201 205 2% 49 49 48

Change in +43 +0 +24 +23 +24

producer

inventory

Total Mining 5,565 5,511 -1% 1,298 1,352 1,201

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Supply

Recycling: 1,691 1,682 -1% 469

408 413

Autocatalyst 1,250 1,243 -1% 353

299 301

Jewellery 372 370 -1% 98

92 95

Industrial 68 69 2% 17

17 17

Total Supply 7,256 7,193 -1% 1,766 1,759 1,614

DEMAND

Automotive 2,897 3,255 12% 737

757 806

Jewellery -2% 466

1,899 1,861 457 455

Industrial: 2,245 2,628 17% 527

531 570

Chemical 684 749 9% 113 273 236

Petroleum 193 171 -11% 44 52 42

Electrical 106 97 -8% 30 24 23

Glass 414 730 76% 127 -21 56

Medical 278 287 3% 68 69 71

Other 570 594 4% 145 134 143

Investment: -640 433 N/A -165 -54 175

Change in Bars, 225 403 79% 59 1 102

Coins

Change in ETF -558 30 N/A -166 -62 43

Holdings

Change in Stocks -307 0 N/A -58 7 30

Held by

Exchanges

Total Demand 6,401 8,176 28% 1,566 1,691 2,006

Balance 854 -983 N/A 201 68 -392

Above Ground 4,774 3,790 -21%

Stocks

Source: World Platinum Investment Council, Platinum

Quarterly Q1 2023

(Reporting by Polina Devitt; editing by Kirsten Donovan)