London: The global platinum deficit is predicted to weigh in at 120,000 oz in 2017, a larger shortfall than previously estimated, driven by a fall in supply, industry lobby group, the World Platinum Investment Council (WPIC), said in its Platinum Quarterly Thursday.

This year will be the sixth consecutive year of deficit, with total supply from mining and recycling predicted to fall 4% year on year in 2017, WPIC added. Therefore, the story is more one of lower supply creating a deficit, rather than racing demand.

The report said that there was a “marked increase in the buying of platinum Exchange Traded Funds (ETFs) in the final quarter of 2016, which saw net purchases 200,000 oz higher than in the previous quarter.”

Platinum is a key ingredient in diesel engine auto-catalysts. “Demand from the automotive sector defied some expectations, ending the year up 1%. The report reveals that year-on-year platinum demand from the Western Europe automotive sector has been higher in every quarter since the third quarter of 2015,” WPIC said.

Still, it wasn’t all positive, with 2016 jewellery demand down 11% from 2015. “However, the Indian market is expected to continue its strong growth with demand predicted to be up by more than 11% [in 2017],” the report said.

India’s jewellery sector is seen as a key growth market for platinum consumption by WPIC, one that is currently dominated by gold.

Paul Wilson, CEO of WPIC said: “Should investment demand in 2017 end up matching that of 2016, this would significantly offset the decrease in total demand currently forecast for 2017.”