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1 Refiner Neste Warns of Weaker Biofuel Outlook, Shares Drop

Company makes 3rd cut to renewables organization outlook this year

Reduces both margin and volume outlook

Weaker diesel market hits 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 stated a drop in the rate of routine diesel had actually impacted what it can charge for the 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 produced a supply excess of low-emissions biofuels, hammering revenue margins for refiners and threatening to hinder the nascent industry.

Neste in a statement slashed the anticipated average comparable sales margin of its renewables system to 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 actually predicted since 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 offer in between 350,000-550,000 tonnes this year, below between 500,000 and 700,000 tonnes seen previously, Neste stated.

"Renewable products' prices have actually been negatively affected by a substantial reduction in (the) diesel rate during the third quarter," Neste stated in a declaration.

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

Industry executives and analysts have actually stated rapidly broadening Chinese biodiesel producers are seeking brand-new outlets in Asia for their exports, while Shell and BP have actually revealed they are stopping briefly growth 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 cost was to be expected, Inderes analyst Petri Gostowski stated.

Neste's share cost 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