Company makes 3rd cut to renewables organization outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel prices

(Adds analyst, 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 service for the third time this year due to falling prices and also lowered its expected sales volumes, sending the company's share price down 10%.

Neste stated a drop in the rate of routine diesel had impacted 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 renewable diesel has actually produced a supply glut of low-emissions biofuels, hammering earnings margins for refiners and threatening to impede the nascent industry.

Neste in a statement slashed the anticipated 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 listed 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 instead 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 offer between 350,000-550,000 tonnes this year, below between 500,000 and 700,000 tonnes seen previously, Neste stated.

"Renewable products' list prices have actually been adversely impacted by a significant reduction in (the) diesel rate throughout the 3rd quarter," Neste said in a declaration.

"At the very same time, waste and residue feedstock prices have not reduced and renewable product market price premiums have stayed weak," the business included.

Industry executives and experts have said rapidly expanding Chinese biodiesel manufacturers are seeking brand-new outlets in Asia for their exports, while Shell and BP have announced they are stopping briefly expansion strategies in Europe.

While the cut in Neste's assistance on sales volumes of sustainable aviation fuel came as a surprise, the unfavorable influence on biodiesel margins from a lower diesel price was to be expected, Inderes expert Petri Gostowski said.

Neste's share price had reversed some losses by 1037 GMT but 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)