"We think the market is in fact moving into deficit this year, based on a significant decline in South African supply and a small reduction of jewellery being recycled because of lower prices," he told a conference in Hong Kong.

"With relatively stable demand, it will push the market into deficit. We believe that will continue for the next few years, again based on lower supply from South Africa, and we also believe the automotive industry is growing."

China, the world's largest platinum jewellery market, could see flat demand this year, although small growth was expected going forward, he added.

Speaking about months-long labour tensions in the industry in South Africa, Engelbrecht said the government was unlikely to take steps to ease the strife ahead of a key conference of the African National Congress (ANC) set to take place next month.

"The situation is still quite volatile," Engelbrecht said.

Eoin Treacy's view The ongoing issues with South African mining are having a deleterious effect on the ability of mines to both increase supply and to contain the cost of production. The declining ore quality of South Africa's platinum mines as well as cost inflation have pushed a number of mining operations into the red and this situation is unlikely to be ameliorated without higher prices.

Platinum pulled back from the upper side of its yearlong range near $1750 in October and has stabilised in the region of $1550 over the last three weeks. Following gold's impressive rebound last week, a sustained move below $1530 would be required to question potential for some additional upside for platinum.

Palladium has also been largely rangebound for the last year and pulled back more from the September high to retest the $600 area where it has stabilised. A sustained move below $555 would be required to question medium-term scope for continued higher to lateral ranging.