SANTIAGO, Aug 20 (Reuters) - Chilean lithium producer

SQM expects prices and sales volumes to rise in the

third quarter, executives said on Wednesday, after the miner

missed estimates for second-quarter net profit.

The world's second-largest lithium producer reported a 59%

decline in quarterly profit, with lithium prices down around a

third year-on-year.

Net profit of $88.4 million missed analysts' estimates of

$143.01 million, according to data compiled by LSEG, while

revenue of $1.04 billion was broadly in line with the estimate

of $1.064 billion.

Chief Executive Ricardo Ramos in a statement said lithium

prices had in some cases hit the lower limits of sales

contracts, affecting agreed volumes.

Executives on a call with analysts declined to give further

details about how the company had adjusted contracts, citing

confidentiality.

They predicted an uptick in sales volumes of at least 10% in

the third quarter from the second quarter, and pointed to

potential supply reductions in China as a good sign for prices.

"We expect that with the recent price recovery in China, our

sales price in Q3 should be higher than in Q2," said Felipe

Smith, SQM's commercial vice president for lithium.

He noted that Asia prices outside of China have also been

strengthening, although more slowly.

Global prices for lithium, a critical component of electric

vehicle batteries, have plunged nearly 90% from a late-2022

peak, leading producers to slash workforces and pull back on

plans.

SQM began laying off 5% of its Chilean workforce in June,

and Moody's last month lowered the miner's outlook to "negative"

due to lithium revenue uncertainty.

SQM also makes fertilizers and industrial chemicals on

Chile's Atacama salt flat, one of the highest concentration

lithium deposits in the world.

The company said it is on track to finalize a partnership

with Chilean state-run copper miner Codelco as soon

as September or October. The deal still requires approval from

regulators in China, after other countries signed off.

SQM also said it expects approval for a major revamp of its

lithium operations in the first half of 2030 as it works to

submit an environmental impact report to authorities next year.