LONDON (Reuters) - The global platinum deficit in 2024 will be deeper than previously expected due to lower supply from mines in South Africa and Russia, the World Platinum Investment Council (WPIC) said on Monday.

2024's deficit of 476,000 troy ounces will, however, be smaller than 2023's 851,000 ounces due to a 5% fall in demand, the WPIC, whose members are major Western platinum producers, said in a quarterly report. It had previously projected the 2024 shortage at 418,000 ounces.

"We've got the second consecutive year of deficit, which will be equal to 6% of total demand in 2024," said Edward Sterck, head of research at the WPIC. "The focus is on the supply, which was the second lowest in our time series in the first quarter with the full year also forecast to be near the record low of 2020."

Already announced restructuring and slower than previously expected production ramp-ups amid low prices for palladium and rhodium will cut production from South African mines by 2% this year. Supply from Russia, which plans smelter maintenance in 2024 and continues to deal with damage caused by Western sanctions, will fall by 9% to a multi-decade low.

Meanwhile, demand for platinum, used in catalytic converters to reduce harmful emissions from vehicle exhaust systems among other applications, is expected to fall by 5% to 7.587 million ounces this year after growing 26% in 2023.

Demand from the auto sector will increase by 2% due to slower consumer demand for battery electric vehicles, growth in both heavy-duty and hybrid vehicle numbers, alongside stricter emissions legislation and platinum-for-palladium substitution, which is forecast to reach 742,000 ounces this year, the WPIC, which uses data from consultancy Metals Focus, added.

To cover the deficit, above-ground stocks will fall by 12%, after a 17% drop in 2023 to a four-year low of 3.620 million ounces, it added.

PLATINUM SUPPLY/DEMAND ('000 oz)*

2022 2023 2024 23/22 24/23 Q1 Q4 Q1

change change 2023 2023 2023

SUPPLY

Refined Production: 5,520 5,604 5,468 2% -2% 1,192 1,532 1,235

- South Africa 3,915 3,956 3,871 1% -2% 778 1,143 816

- Zimbabwe 480 507 502 6% -1% 116 133 121

- North America 263 276 276 5% 0% 71 72 72

- Russia 663 674 616 2% -9% 180 136 178

- Other 200 190 203 -5% 7% 48 48 48

Change in producer inventory +43 +11 0 +33 -23 0

Total mining supply 5,563 5,615 5,468 1% -3% 1,226 1,509 1,235

Recycling: 1,764 1,557 1,642 -12% 5% 400 338 390

- Autocatalyst 1,323 1,138 1,201 -14% 6% 287 235 275

- Jewellery 372 349 366 -6% 5% 95 85 98

- Industrial 69 71 75 3% 7% 17 18 17

TOTAL SUPPLY

-1%

7,327 7,172 7,111 -2% 1,626 1,847 1,625

DEMAND

Automotive 2,763 3,211 3,269 16% 2% 810 816 832

Jewellery 1,899 1,868 1,978 -2% 6% 463 476 486

Industrial: 2,316 2,626 2,242 13% -15% 656 737 612

- Chemical 673 786 529 17% -33% 295 132 142

- Petroleum 193 158 156 -18% -1% 41 38 39

- Electrical 106 89 88 -16% -1% 23 22 22

- Glass 505 701 524 39% -25% 80 310 175

- Medical 275 289 299 5% 3% 75 71 78

- Hydrogen stationary 15 33 75 114% 128% 5 13 14

- Other 548 571 571 4% 0% 137 150 142

Investment: -606 318 99 -69% 198 -71 64

- Bars, Coins 259 323 199 25% -38% 128 61 64

- ETF Holdings -558 -20 -120 40 -116 11

- Stocks held by exchanges -307 14 20 29 -16 -11

TOTAL DEMAND

-5%

6,372 8,023 7,587 26% 2,128 1,959 1,994

Balance 955 -851 -476 -502 -112 -369

Above ground stocks 4,947 4,097 3,620 -17% -12%

Source: Metals Focus 2020-2024