Company makes third cut to renewables service outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel costs

(Adds analyst, 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 service for the third time this year due to falling costs and likewise reduced its anticipated sales volumes, sending the business's share cost down 10%.

Neste stated a drop in the price of regular diesel had actually 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 sustainable diesel has created a supply glut of low-emissions biofuels, hammering profit margins for refiners and threatening to hinder the nascent industry.

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

The business now likewise sales volumes in 2024 to be about 3.9 million tonnes rather of the 4.4 million it had actually predicted since the start of the year, it added.

A part of the volume cut came from the production of sustainable air travel fuel, of which it is now expected to sell in between 350,000-550,000 tonnes this year, down from in between 500,000 and 700,000 tonnes seen previously, Neste said.

"Renewable items' list prices have actually been adversely affected by a substantial reduction in (the) diesel cost throughout the 3rd quarter," Neste stated in a declaration.

"At the same time, waste and residue feedstock rates have not reduced and sustainable product market price premiums have stayed weak," the business included.

Industry executives and analysts have stated quickly expanding Chinese biodiesel manufacturers are looking for brand-new outlets in Asia for their exports, while Shell and BP have revealed they are pausing expansion strategies in Europe.

While the cut in Neste's assistance on sales volumes of sustainable aviation fuel came as a surprise, the negative effect on biodiesel margins from a lower diesel rate was to be expected, Inderes expert Petri Gostowski said.

Neste's share rate had actually reversed some losses by 1037 GMT but 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)