Company makes 3rd cut to renewables service outlook this year

Reduces both margin and volume outlook

Weaker diesel market hits biofuel prices

(Adds analyst, background, detail in 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 rates and also lowered its expected sales volumes, sending the business's share price down 10%.

Neste said a drop in the price of regular diesel had actually affected 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 produced a supply excess of low-emissions biofuels, hammering earnings margins for refiners and threatening to restrain the nascent market.

Neste in a declaration slashed the expected 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 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 forecasted because the start of the year, it included.

A part of the volume cut originated 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 stated.

"Renewable items' sales prices have actually been negatively impacted by a substantial decline in (the) diesel price during the third quarter," Neste said in a declaration.

"At the exact same time, waste and residue feedstock prices have actually not reduced and renewable item market value premiums have stayed weak," the business added.

Industry executives and experts have actually stated rapidly broadening Chinese biodiesel producers are seeking brand-new outlets in Asia for their exports, while Shell and BP have announced they are stopping briefly expansion plans in Europe.

While the cut in Neste's guidance on sales volumes of sustainable air travel fuel came as a surprise, the unfavorable effect on biodiesel margins from a lower diesel rate was to be anticipated, Inderes expert Petri Gostowski said.

Neste's share rate had actually 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