(Updates with comments from CEO Ricardo Ramos, hydroxide expansion announcement)
SANTIAGO, March 3 (Reuters) - Chilean miner SQM, the world's No. 2 producer of lithium posted record lithium sales in the last quarter of 2020, although floundering prices for the ultralight metal continued to weigh on the company´s profits.
After the coronavirus pandemic dented earnings last year, SQM SQMA.SN and peers like Albemarle ALB.N are expected to cash in on surging demand for battery metal lithium, critical to the electric vehicles that have become popular amid climate change concerns.
SQM said late on Wednesday its lithium sales volumes in the fourth quarter jumped 50% from the previous quarter, hitting a three-month record of more than 25,000 tonnes. But prices stagnated at $5,300 per tonne, the company said, leaving net income on par with the same quarter of 2019.
"We believe that this could be the bottom of the decreasing pricing trend and that we could see higher prices during the first half of 2021," the company said in a statement.
SQM CEO Ricardo Ramos cautioned in a call with analysts on Thursday that the company still did not foresee a "strong price increase in a short period of time," as has been the case with the sky-rocketing price of copper recently.
The company said booming growth in electric vehicle sales in the fourth quarter of 2020 was nonetheless fueling optimism for higher volumes.
"We expect this momentum to continue into 2021 and believe that lithium demand growth will reach almost 25% this year," the company said.
Ramos said the company would soon announce a project to ramp up its capacity to produce battery metal lithium hydroxide to 60,000 tonnes amid soaring demand, calling the previous target of 30,000 tonnes "not enough."
SQM last month announced it would go forward with its Mt. Holland lithium project in Western Australia, a joint venture with Wesfarmers Ltd WES.AX , slated to come online in late 2024.