LONDON (Reuters) - The global platinum market will be oversupplied by around half a million ounces both this year and next, an industry report said on Wednesday, suggesting little respite for producers facing prices languishing near 10-year lows.

FILE PHOTO: Ingots of 99.98 percent pure platinum are seen at the Krastsvetmet non-ferrous metals plant, one of the world's largest producers in the precious metals industry, in the Siberian city of Krasnoyarsk, Russia November 22, 2018. REUTERS/Ilya Naymushin

In its latest Platinum Quarterly report, the World Platinum Investment Council (WPIC) revised its forecast for oversupply this year to 505,000 ounces from 295,000 ounces, blaming weak demand for platinum jewelery, and said 2019 would see a surplus of 455,000 ounces.

“Supply will grow (in 2019) but demand will grow even more, and reduce the surplus slightly,” said the WPIC’s head of research Trevor Raymond.

Platinum prices hit a 10-year low in August and are down 9 percent this year.

The market flipped from deep deficit earlier this decade to surplus as falling use by automakers, jewelers and investors pushed demand from 8.5 million ounces in 2013 to an estimated 7.5 million ounces this year, said the WPIC, which is funded by platinum miners.

(GRAPHIC: Platinum supply-demand balance - tmsnrt.rs/2RdcdAF)

Raymond said the decline in demand from carmakers would slow next year, while jewelery demand would expand for the first time since 2014, and consumption by industry and investors would grow strongly, lifting total demand by 2 percent.

Demand from automakers -- which embed platinum in emissions-reducing catalytic converters and account for around 40 percent of platinum use -- will fall by 1 percent in 2019 after a 7 percent plunge this year as a decline in sales of diesel vehicles in Europe slows, the WPIC said.

Carmakers use both platinum and sister metal palladium in autocatalysts, but platinum is used more in diesel engines whose popularity plummeted after Volkswagen was found to have cheated emissions tests in 2015.

The WPIC said it assumed no significant substitution next year of palladium for platinum, which is trading at a roughly $300 discount to its sister metal after last year becoming cheaper than palladium for the first time since 2001.

Demand for platinum in jewelery will rise by 1 percent in 2019 after a 2 percent decline this year, the WPIC said.

Use in industry will increase by 4 percent in 2019 after an 8 percent rise this year and demand for platinum bars and coins for investment will double from 125,000 ounces this year.

On the supply side, the WPIC said higher output at mines in South Africa and North America and increased recycling would push supply up 2 percent in 2019 after a 1 percent fall this year.

(GRAPHIC: 2018 asset returns - tmsnrt.rs/2jvdmXl)