By Dave Sherwood
SANTIAGO, Aug 22 (Reuters) - SQM, the world's No.2 producer of lithium, saw its profits plunge along with lithiumprices in the second quarter, even as the Chile-based miner saidit had sold more of the ultralight battery metal.
Profits sank 47.5% to $70.2 million in the second quarter,from $133.9 million a year earlier, the company said in astatement, though the drop was largely in line with analysts'expectations.
"The second quarter results were mainly impacted by lowerlithium sale prices," Chief Executive Ricardo Ramos said in astatement. "We have seen lithium supply growing more than demandover the past few quarters, putting pressure on prices."
News of the pessimistic outlook for prices sent B-shares inSQM down 6.6% at mid-afternoon on Santiago's StockExchange.
Shares of lithium industry leader Albemarle Corpfell 4.4% and Livent Corp dropped 5.6%, both on the NewYork Stock Exchange.
SQM said its lithium sale price in the third quarter waslikely to drop to $10,000 per tonne, down one-third from itsaverage first-quarter sale price of $14,600. The third-quarterfigure may also weigh on a previous SQM estimate of$11,000-$12,000 per tonne for the second half of 2019.
Demand for lithium, a key component of batteries used incell phones, electric vehicles and other consumer goods, iswidely expected to triple by 2025.
But festering global trade tensions, the scaling back ofelectric vehicle subsidies in China and a wave of new outputhave stifled both demand and prices in recent months.
Ramos said the downturn in prices was likely attributable inpart to flagging Chinese demand, which he expected to fall by3,000-4,000 tonnes in 2019.
"The reduction in total demand of lithium carbonate inChina...is affecting supply and demand worldwide," Ramos said.
Weak demand and looming oversupply have already promptedsome miners to put off near-term investments.
The world's top lithium producer Albemarle saidearlier this month it would delay construction plans for about125,000 tons of additional lithium processing capacity.
Despite the headwinds, SQM said it expected sales volumes toincrease later this year.
Sales volumes grew more than 14% in the second quarter to22,800 tonnes, the company said.
SQM earlier this year delayed an expansion at its Atacamaoperations from the end of 2020 to late 2021, citingfast-changing technical specifications of buyers.
Ramos said in a Thursday earnings call that he expectedsales volumes to hit 65,000 tonnes in 2020.(Reporting by Dave Sherwood; Additional reporting by ErnestScheyder; Editing by Bernadette Baum and Richard Chang)