Company makes 3rd cut to renewables service outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel rates

(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 business for the 3rd time this year due to falling rates and likewise reduced its anticipated sales volumes, sending the business's share price down 10%.

Neste said a drop in the cost 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 remained high.

A rush by U.S. fuel makers to recalibrate their plants to produce renewable diesel has actually produced a supply glut of low-emissions biofuels, hammering earnings margins for refiners and threatening to impede the nascent market.

Neste in a declaration slashed the anticipated average similar sales margin of its renewables system 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 business now also anticipates renewables-based sales volumes in 2024 to be about 3.9 million tonnes instead 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 anticipated to sell in between 350,000-550,000 tonnes this year, below between 500,000 and 700,000 tonnes seen formerly, Neste stated.

"Renewable items' prices have actually been adversely impacted by a considerable decrease in (the) diesel price during the 3rd quarter," Neste stated in a statement.

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

Industry executives and analysts have actually stated quickly expanding Chinese biodiesel producers 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 travel fuel came as a surprise, the unfavorable effect on biodiesel margins from a lower diesel rate was to be expected, Inderes analyst Petri Gostowski said.

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; Editing by Terje Solsvik and Jan Harvey)