Company makes 3rd cut to renewables company outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel costs

(Adds expert, background, information 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 third time this year due to falling prices and likewise lowered its expected sales volumes, sending out the company's share price down 10%.

Neste stated a drop in the cost of routine diesel had actually affected what it can charge for the biofuel it makes in Europe and Singapore, while input costs for waste and residue feedstock stayed high.

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

Neste in a statement slashed the expected typical similar sales margin of its renewables system to in between $360-$480 per tonne of biofuel, down from $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 forecasted given that the start of the year, it added.

A part of the volume cut originated 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 between 500,000 and 700,000 tonnes seen previously, Neste said.

"Renewable items' prices have actually been adversely affected by a considerable reduction in (the) diesel cost throughout the third quarter," Neste said in a declaration.

"At the exact same time, waste and residue feedstock rates have not decreased and sustainable item market value premiums have actually stayed weak," the business added.

Industry executives and analysts have said quickly broadening Chinese biodiesel manufacturers are looking for new outlets in Asia for their exports, while Shell and BP have revealed they are pausing growth plans 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 anticipated, Inderes analyst Petri Gostowski said.

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)