Company makes third cut to renewables company outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel prices

(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 third time this year due to falling prices and likewise reduced its expected sales volumes, sending the company's share rate down 10%.

Neste said a drop in the cost 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 remained high.

A rush by U.S. fuel makers to recalibrate their plants to produce renewable 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 statement slashed the anticipated typical similar sales margin of its renewables unit to in 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 also anticipates 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 came from the production of sustainable aviation fuel, of which it is now expected to sell between 350,000-550,000 tonnes this year, below in between 500,000 and 700,000 tonnes seen formerly, Neste said.

"Renewable items' prices have actually been negatively affected by a substantial decline in (the) diesel rate throughout the 3rd quarter," Neste said in a declaration.

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

Industry executives and experts have stated quickly expanding Chinese biodiesel manufacturers are looking for brand-new outlets in Asia for their exports, while Shell and BP have announced they are stopping briefly growth plans in Europe.

While the cut in Neste's assistance on sales volumes of sustainable air came as a surprise, the unfavorable influence on biodiesel margins from a lower diesel price was to be expected, Inderes analyst 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