Company makes 3rd cut to renewables organization outlook this year


Reduces both margin and volume outlook


Weaker diesel market strikes biofuel rates


(Adds expert, background, detail in paragraphs 2-3, 9-11)


By Elviira Luoma and Essi Lehto


HELSINKI, Sept 11 (Reuters) - Finnish refiner Neste on Wednesday cut the margin outlook for its biofuel organization for the 3rd time this year due to falling rates and likewise decreased its anticipated sales volumes, sending the company's share price down 10%.


Neste said a drop in the cost of regular diesel had impacted what it can charge for the biofuel it makes in Europe and Singapore, while input expenses for waste and residue feedstock stayed high.


A rush by U.S. fuel makers to recalibrate their plants to produce renewable diesel has developed a supply excess of low-emissions biofuels, hammering profit margins for refiners and threatening to hamper the nascent market.


Neste in a declaration slashed the anticipated typical similar sales margin of its renewables system to in between $360-$480 per tonne of biofuel, below $480-$580 per tonne seen in July and well below the $600-$800 seen in February.


The company now likewise expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had actually anticipated considering that the start of the year, it added.


A part of the volume cut came from the production of sustainable aviation fuel, of which it is now anticipated to sell in between 350,000-550,000 tonnes this year, below in between 500,000 and 700,000 tonnes seen formerly, Neste stated.


"Renewable products' list prices have been negatively impacted by a considerable decline in (the) diesel price throughout the third quarter," Neste stated in a declaration.


"At the same time, waste and residue feedstock rates have not reduced and eco-friendly item market cost premiums have actually remained weak," the company added.


Industry executives and experts have stated rapidly broadening Chinese biodiesel manufacturers are seeking brand-new outlets in Asia for their exports, while Shell and BP have actually revealed they are pausing expansion strategies in Europe.


While the cut in Neste's guidance on sales volumes of sustainable aviation fuel came as a surprise, the unfavorable influence on biodiesel margins from a lower diesel price was to be expected, Inderes analyst Petri Gostowski stated.


Neste's share cost had reversed some losses by 1037 GMT however remained down 5.8% on the day and 48% lower year-to-date. (Reporting by Elviira Luoma, Essi Lehto and Boleslaw Lasocki; Editing by Terje Solsvik and Jan Harvey)