the platinum market is likely to see a deficit of more than half a million ounces in 2023 amid strong automotive demand and constrained supply from south africa for the precious metal a new report shows platinum which has been in surplus for more than two years is now likely to see a deficit of 556000 ounces with demand set to rise by 24 but supply likely to increase by just 3 this year the world platinum investment council said in the report wednesday total supply is expected to stand at 743 million ounces while demand is likely to hit 798 million ounces wpic said last year the market had been in a surplus of more than 776000 ounces which reflects a 13 million ounce shift in terms of market fundamentals the shift has been driven by supply constraints according to wpic notably in south africa where power issues have severely hurt refining activities in the country in the fourth quarter of 2022 alone total supply was down 18 on year to 174 million ounces although power supply risks and operational challenges have been factored into the mining supply forecast for 2023 a worsening of electricity supply shortages in major producer south africa and a gradual erosion of operational stability in russia linked to ongoing sanctions present downside risks to supply the council said in the report in 2022 mine supply dropped by 11 on year to 555 million ounces recycled supply from north america has declined as fewer consumers are purchasing new cars due to macroeconomic weakness with 349000 fewer ounces being supplied to the market in 2022 wpic said this is likely to continue in 2023 with recycled supply only set to grow by 173000 ounces on year  reflecting a 176000 ounce loss to the market compared with 2021 levels demand however is expected to surge in 2023 mainly from the automotive sector looking to substitute palladium for platinum as both are used in catalytic converters to help combat greenhouse emissions the investment body expects auto demand alone to rise 12 on year to 296 million ounces an increase in platinum loadings meanwhile has been driven by a higher uptake of hybrid vehicles which typically require them in aftertreatment systems as well as tighter emission standards in china for heavyduty vehicles demand from industrial sectors such as glass and medical use is also set to be firm at 251 million ounces partially offsetting weakness in jewelry demand with buying in chinaforecast at 194 million ounces in 2023 still weak wpic said platinum prices have lowered since the start of january on tuesday they sat at 971 a troy ouncedown from 110430 an ounce on jan 10in line with moves from other dollarbacked commodities such as gold given the shift in market fundamentals more aboveground stocks will have to be drawn upon to meet demand edward sterck director of research at wpic said in a call within the last two years much of the aboveground stock has moved to china from western nations and with mine supply tightening more imports to china could be expected he said on the investment side more exchangetraded funds are looking to hold platinum as well as increased holdings of bars and coins with total investment demand forecast at 298000 ounces last year investment demand saw 643000 ounces of outflows consumers in japan who have traditionally held physical platinum as bars and coins are now buyers again having sold off last year as the dollar strengthened and the yen weakened making platinum a less attractive investment mr sterck said consumers had normalized to the weaker yen and so global bar and coin demand is expected to rise to 450000 ounces from 225000 ounces he said additionally more investors are looking to purchase physical holdings of the metal over platinum equities given the macroeconomic challenges equity markets are currently facing mr sterck said