Company makes third cut to renewables organization 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 3rd time this year due to falling prices and likewise lowered its expected sales volumes, sending out the business's share price down 10%.

Neste said a drop in the rate of regular diesel had 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 sustainable diesel has actually created a supply glut of low-emissions biofuels, hammering earnings margins for refiners and threatening to impede the .

Neste in a declaration slashed the anticipated typical similar sales margin of its renewables unit 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 also anticipates 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 added.

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

"Renewable products' prices have actually been adversely affected by a substantial decline in (the) diesel price during the 3rd quarter," Neste said in a statement.

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

Industry executives and analysts have said quickly broadening Chinese biodiesel manufacturers are seeking new outlets in Asia for their exports, while Shell and BP have actually announced they are stopping briefly expansion strategies 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 cost was to be anticipated, Inderes expert Petri Gostowski stated.

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