UPDATE 1-Lithium miner SQM warns of further slide in prices in 2020, impact of coronavirus

(Adds additional comments from Ramos on China sales volumes, total production)

SANTIAGO, March 3 (Reuters) - Chilean miner SQM, the world’s No. 2 lithium producer, saw profits tumble in the last quarter of 2019 and warned that early 2020 sales in China, a key market for the battery metals used in electric vehicles, could be hit by the impact of the coronavirus.

The lithium giant is the latest miner to report grim 2019 results as overproduction of the metal drives down prices and dents revenues.

SQM posted fourth-quarter net income of $66.9 million, a 38% drop compared to $108.6 million in the same period in 2018, according to its quarterly earnings statement. Gross profits slid more than 30% to $137.8 million.

Quarterly lithium revenues plunged 57.4%, battered by continued low prices, the company said.

It added that the oversupply driving the fall in prices could linger into 2020 and “further impact average prices this year when compared to 2019.”

SQM CEO Ricardo Ramos said overall lithium demand nonetheless grew 14% in 2019, in line with the company’s expectations and hinting at a coming boom in demand.

“During 2020, we believe the European electric vehicle market will gain momentum and contribute significantly to lithium demand growth,” the company said in the statement.

In China, Ramos noted logistics had been dogged by the coronavirus but said there were signs business was getting back to normal.

“Depending on the evolution of the coronavirus outbreak, we may be able to recover some of those sales volumes and reach 55-60k metric tonnes in 2020.”

He said SQM would produce as much as 70,000 tonnes of lithium in 2020 in a bid to build inventory and increase shipments to China to 40% of the company’s total sales volumes, up from 30% in 2019.

SQM rival Albemarle Corp, the world’s largest lithium producer, last month reported lower-than-expected profits in late 2019 and forecast a double-digit drop in 2020 earnings on weak prices for the battery metal.

U.S. lithium producer Livent Corp also said it expects profits to drop in 2020. (Reporting by Dave Sherwood; Editing by Kirsten Donovan and Sandra Maler)