SANTIAGO, Aug 21 (Reuters) - Chile's SQM, the

world's second-largest lithium producer, reported a

bigger-than-expected 63.2% slide in its quarterly profit on

Wednesday due to weak prices of the battery metal, which it

expects will continue for the rest of the year.

The miner, which also produces fertilizers and industrial

chemicals, posted a second-quarter net profit of $213.6 million,

or 75 cents a share, missing analysts estimates of $296.7

million, or 95 cents a share, according to LSEG data.

Its revenue of $1.3 billion in the quarter was in line with

analysts's expectations, based on LSEG data.

SQM produces the white metal in the Atacama salt flat of

northern Chile, home to the world's highest lithium

concentration in brine, giving it an advantage of low-cost

production.

But, while it posted record-high quarterly sales volumes of

lithium, its results were dragged down by a significant drop in

the metal's prices and CEO Ricardo Ramos said that trend will

continue.

"We see this pricing trend continuing in the second half of

this year, with current lithium price indices in China nearly

20% lower than the average lithium price indices in the second

quarter of 2024."

A basket of lithium prices tracked by Benchmark Mineral

Intelligence shows they have fallen about 70% over the past year

because of weaker-than-expected global demand for electric

vehicles due, in part, to high borrowing costs and global

uncertainty.

Ramos said some lithium producers may reduce their output

since the low prices made projects economically unviable.

SQM said it will continue with its expansion plans, although

it is reevaluating specific markets and initiatives that may be

"less attractive in the near term under these conditions."

U.S. rival Albemarle, which also operates in

Atacama, said last month it would cut costs, after posting a

second-quarter loss.