According to a recent report from the World Investment Platinum Council, platinum supply is expected to fall significantly short of demand over the course of 2023. They project a deficit of around 1 million ounces for the year, which would be a record high.

Sustained increases in demand are putting pressure on supply sources that are struggling to keep pace. Automotive demand was up 19% in Q2 2023 as catalytic converters remain the primary use case. Environmental regulations continue pushing auto manufacturers to adopt platinum-based emissions control technologies.

Green energy production is another growing sector, with platinum playing a key role in hydrogen fuel cell stacks that enable renewable power storage and transportation. Overall demand has climbed 27% this year.

However, platinum mining has faced challenges maintaining output levels. South Africa is the dominant supplier but prolonged electricity shortages have crimped production from existing mines. Q2 2023 refined output fell 4% year-over-year. Recycling volumes are also trending lower.

Given production constraints and rising consumption across multiple industries, inventories will be drawn down further without timely investments to boost mining capacity. Suppliers will need to assess opportunities for moderate, sustainable expansions to address the projected long-term supply/demand imbalance.

Another factor contributing to tight supply is increased investment demand for physical bars and coins, up an estimated 45% this year. With price appreciation and currency safe-haven attributes, platinum retains portfolio hedge qualities.

History shows similar bullish structures preceded extended upward trends previously, such as in 2002. Should supply deficits persist, above-ground stocks may continue supporting elevated platinum prices through this cycle. All indicators point to a prosperous environment for responsible mining operations in the period ahead.