Company makes third cut to renewables business outlook this year

both margin and volume outlook

Weaker diesel market strikes biofuel costs

(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 costs and likewise reduced its anticipated sales volumes, sending the company's share cost down 10%.

Neste stated a drop in the rate of regular diesel had actually impacted 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 eco-friendly diesel has actually created a supply glut of low-emissions biofuels, hammering revenue margins for refiners and threatening to restrain the nascent industry.

Neste in a statement slashed the anticipated typical equivalent sales margin of its renewables unit to 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 business now also expects renewables-based sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had anticipated given that the start of the year, it included.

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

"Renewable products' list prices have been adversely affected by a considerable decrease in (the) diesel cost during the third quarter," Neste said in a declaration.

"At the same time, waste and residue feedstock costs have not decreased and sustainable item market value premiums have actually stayed weak," the company included.

Industry executives and analysts have actually said quickly broadening Chinese biodiesel manufacturers are seeking new outlets in Asia for their exports, while Shell and BP have actually revealed they are pausing growth strategies in Europe.

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

Neste's share price had reversed some losses by 1037 GMT but stayed down 5.8% on the day and 48% lower year-to-date. (Reporting by Elviira Luoma, Essi Lehto and Boleslaw Lasocki