SANTIAGO - 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.