London (Platts)--18Dec2012/916 am EST/1416 GMT

HSBC on Monday raised its raised its 2103 average platinum price forecast to $1,710/oz from $1,625/oz on projections of tighter supply.

In addition, the bank increased its 2014 forecast to $1,800/oz from $1,775/oz, senior analyst Jim Steel said in a note to clients.

The bank also boosted its long-term price forecast for the metal, predicting a price of $1,825/oz from the earlier $1,800/oz in five years unadjusted for inflation.

Steel said low "prices have made a considerable amount of South African platinum production uneconomical and are raising the possibility of further producer rationalization. Industrial stoppages are also limiting output. We believe supply tightness is a major factor contributing to our forecast of a 2013 deficit and should help propel prices."

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South Africa accounts for nearly 80% of the world's platinum supply.

Steel said that, based on the bank's supply/demand model, "we forecast a platinum market deficit of [about] 256,000 oz for 2013. This represents a narrowing of [about] 144,000 oz from this year's deficit of [about] 400,000oz, as estimated by Johnson Matthey, the world's largest PGM fabricator. The deficits come after a substantial surplus of 541,000 oz recorded in 2011, according to our supply/demand model."

--Ben Kilbey, ben_kilbey@platts.com
--Edited by Jeff Barber, jeff_barber@platts.com

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