(Adds details from conference call)

By Ernest Scheyder

Nov 7 (Reuters) - Albemarle Corp, the world's largest lithium producer, warned on Thursday that prices for the battery metal are down nearly a third in the past year and that the industry has two to three times more supply than needed.

It was the latest lightning bolt to strike the fast-growing industry, which directly supplies the building blocks for electric vehicle batteries. Industry rival Livent Corp warned on Wednesday of "difficult" market conditions.

Despite the aggressive growth of the electric vehicle market, lithium producers are in a nightmare of their own making by having processed too much of the white metal, too fast.

"We are and will be dealing with the challenging market conditions for the next 12 to 18 months," Albemarle Chief Executive Officer Luke Kissam told investors on a conference call. "There's an oversupply in the market today."

Charlotte, North Carolina-based Albemarle has delayed construction plans for about 125,000 tonnes of additional lithium processing capacity, part of a plan to be cash flow-positive within two years.

The company said late on Wednesday it would launch a $100 million cost savings plan after it cut its sales and profit forecasts for the year. Asked by investors when the cost cutting would start, Kissam said it was not yet clear and promised answers at the company's annual investor day, planned for early December.

Despite the challenging market, Albemarle has no problems honoring existing contracts and is able to boost production should market conditions improve, Kissam said.

However, the company is in active negotiations with existing customers on long-term contracts about price, volume, timing and other facets, Kissam said, talks that could ultimately prove favorable for those customers.

"Rest assured that we understand the value we bring to the supply chain, and we intend to capture our fair share in these discussions," Kissam said. He noted, though, that Albemarle expects its lithium unit's financial metrics to drop sequentially in 2020.

In Chile, which has been experiencing social unrest in recent weeks, Albemarle's La Negra lithium plant has not run as well as the company had hoped, Eric Norris, president of the company's lithium global business unit, said on the call. The plant is producing about 38,000 tonnes of lithium, about 2,000 tonnes less than expected.

The unrest has reduced Chilean production by about 500 tonnes but is not expected to have a material impact on annual results, the company said.

"At this time, our plants are operational and shipments are moving on schedule," Chief Financial Officer Scott Tozier told investors. (Reporting by Ernest Scheyder Editing by Chizu Nomiyama and Paul Simao)