South Korea's LG Display Co Ltd <034220.KS> posted a second straight quarter of losses due to weak LCD prices, but forecast a pick-up in prices and shipments as the industry recovers from a steep downturn.

The first quarter could be seen as the bottom for LG Display and the recovery is coming faster than expected, said Lim Seung-beom, an analyst at Hanwha Securities.

The liquid crystal display (LCD) industry has been battered by steep falls in prices of screens used in flat TVs and computer monitors, forcing manufacturers to slash output in the second half of last year.

But hopes are growing for a turnaround in the 2009 second half as lower prices have boosted consumer appetite for LCD TVs, though analysts note there is still excess capacity.

Strong demand from China will probably be maintained, said Kang Chung-won, an analyst at Daishin Securities. But broader global LCD demand in the second half of this year may turn out to be not as strong as hoped, and this poses one of the main risks.

LG Display , the world's second-biggest LCD maker, expects the average price of its panels to rise gradually in the current quarter and panel shipments to increase by a mid- to high-20s percent rate in the same period. Panel prices on average fell 13 percent from the fourth quarter.

It said its factory utilization rate had improved to 93 percent in January-March from 80 percent in the fourth quarter.

LG Display, which ranks behind Samsung Electronics Co Ltd <005930.KS>, posted a 412 billion won ($310.7 million) operating loss for January-March, bigger than a 399 billion won loss forecast by Reuters Estimates.

The January-March net loss of 255 billion won was better than a consensus forecast. Consolidated first-quarter sales were 3.67 trillion won.

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Many analysts expect LG Display to return to profit in the third quarter, helped by growing demand for TVs and strong performances by major clients such as LG Electronics Inc <066570.KS> and Chinese TV makers.

China's policy to subsidize electronics purchases in rural areas is fuelling demand there.

But any upturn is likely to be modest.

LG Display's earnings will continue to show gradual recovery this year, but though they won't fall further, it won't be easy for LCD prices to actually rise again, said Lee Hak-moo, an analyst at Mirae Asset Securities.

In a deal to strengthen its supplier relationships, LG said it would pay 12 billion won ($9 million) for a 30 percent stake in Wooree LED, an LED packaging unit of Wooree ETI <082850.KQ>.

Helped by recovery hopes, shares in LG Display gained more than a third in January-March, beating the broader market's <.KS11> 14 percent rise.

(Additional reporting by Jungyoun Park, Angela Moon and Shin Ji-eun)

(Editing by Jonathan Hopfner and Ian Geoghegan)