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The biggest takeaway from today's Platinum Quarterly report and updated full-year forecast of the World Platinum Investment Council (WPIC) is the predicted record platinum deficit of more than a million ounces as well as the nigh wipe out of above-ground platinum stocks.

Speaking to Mining Weekly on the WPIC's latest Platinum Quarterly and updated full-year forecast, WPIC research director Edward Sterck pointed out that forecast is the biggest platinum deficit on record in both ounce terms and as a percentage of demand. (Also watch attached Creamer Media video.)

By the end of this year, it is estimated that above-ground platinum stocks will be down to about six weeks of supply, which the market is expected to begin reflecting.

With total supply flat, total demand will lift 27%, with automotive recovery up 13%, or 381 000 oz, driven by greater-than-expected vehicle production, increased substitution and higher loadings.

Industrial demand is heading for a record 2 667 000 oz through capacity expansions, and total 2023 investment demand is forecast to be 386 000 oz.

The core drivers of platinum's expected 27% demand growth in 2023 were clear to see in the second quarter of this year, and built upon foundations laid in the previous two quarters.

The research shows that automotive and industrial demand growth underpin total demand growth in 2024 and beyond, which offers both short- and long-term value incentives for investors, as well as protection from downside risks presented by inflationary headwinds and high interest rates.

Continuing electricity shortages in South Africa are exacerbating the deficit and maintaining the downside risk to mined supply.

Meanwhile, the link between platinum and the green hydrogen economy is increasingly better known owing to green hydrogen produced by platinum-containing electrolysers having a significant role to play in the energy transition.

Mine supply is expected to be broadly flat year-on-year and so is recycling supply, also broadly flat year-on-year.

Demand is being driven by a 13% increase in automotive demand year-on-year in combination with a 14% increase in industrial demand, and then a strong year-on-year improvement in investment demand.

"Over the course of probably 2021 and 2022, we saw quite strong disinvestment from platinum. This year, we're expecting that to move back into pretty reasonable positive territory. All of those factors in aggregate, ultimately result in that strong 27% year-on-year growth in demand," Sterck tells Mining Weekly.

How significant is automotive and industrial demand growth?

Both are expected to grow quite significantly. Automotive demand is being driven by ongoing substitution of platinum and palladium. It's also being supported by an increase in vehicle production numbers this year. Over the last couple of years, we saw vehicle production or vehicle outputs, being artificially suppressed by the semiconductor shortage, so effectively, the automakers simply couldn't secure enough semiconductors to manufacture cars. This year we're seeing that situation significantly ease and then you've also got a tightening of emissions legislation which is resulting in sort of more PGMs being used in the exhaust treatment systems for heavy-duty vehicles and for non-road vehicles in particular. That's a big factor for the automotive side. On the industrial side, we've got big capacity additions in the chemicals industry. Those came through in the second quarter of this year, but also in the second half of the year, quite a number of new glass manufacturing facilities are expected to come online, and those two factors are really what's driving industrial demand growth. I guess we're only talking about 2023, but as the standard at the moment, it's difficult to see any real changes to those demand drivers going forward, so we would sort of be expecting to see continued strength in demand in su...