SANTIAGo – Chile's SQM, the world's No. 2 producer of lithium, saw its quarterly earnings plummet by nearly half amid a slump in prices for the ultralight battery metal, even as sales volumes grew.

Profits sank 47.5% to $70.2-million in the second quarter, from $133.9-million a year earlier, though the figure was largely in line with analyst expectations.

"The second quarter results were mainly impacted by lower lithium sale prices," CEO Ricardo Ramos said in a statement. "We have seen lithium supply growing more than demand over the past few quarters, putting pressure on prices."

SQM said its lithium sale price in the third quarter was likely to fall by nearly one-third to $10 000, from its average first-quarter sale price of $14 600/T. The figure also represents a drop from a previous SQM estimate of $11 000/T to $12 000/t  for the second half of 2019.

The miner attributed the sharp drop in its selling prices to higher sales to China, where prices have slumped.

Demand for lithium, a key component of batteries used in cell phones, electric vehicles and other consumer goods, is widely expected to spike by 2025.

But festering global trade tensions, the scaling back of electric vehicle subsidies in China and a wave of new production have pushed down prices in recent months, prompting some miners to put off near-term investments.

World top lithium producer Albemarle said earlier this month it would delay construction plans for about 125 000 t of additional lithium processing capacity, citing a market oversupply.

Still, SQM expects sales volumes to jump in the near-term, noting it had already boosted sales volumes to China.

"We sold higher sales volumes in the second quarter and expect to sell higher volumes in the second half of the year as we prepare for a 30% to 40% increase in sales volumes next year," Ramos said.

Sales volumes grew more than 14% in the second quarter, to 22 800 t, the company said.

SQM earlier this year pushed back a key expansion at its Atacama salt flat operations from the end of 2020 to late 2021.

The company blamed the unexpected delay on fast-evolving requirements of the red-hot battery technology industry, but said flagging demand and prices had not weighed on its decision.