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Add 'Refiner Neste Warns of Weaker Biofuel Outlook, Shares Drop'

Kassandra Melrose 2025-01-12 08:57:53 +11:00
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<br>Company makes third cut to renewables service outlook this year<br>
<br>Reduces both margin and volume outlook<br>
<br>Weaker diesel market strikes [biofuel](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) costs<br>
<br>(Adds analyst, background, detail in paragraphs 2-3, 9-11)<br>
<br>By Elviira Luoma and Essi Lehto<br>
<br>HELSINKI, Sept 11 (Reuters) - Finnish [refiner](https://www.abnnewswire.net/companies/en/31347/%E0%B8%9A%E0%B8%A3%E0%B8%B4%E0%B8%A9%E0%B8%B1%E0%B8%97-Mission-NewEnergy-%E0%B8%88%E0%B8%B3%E0%B8%81%E0%B8%B1%E0%B8%94.html/4) Neste on Wednesday cut the margin outlook for its [biofuel](https://stocktwits.com/symbol/MNEL) business for the 3rd time this year due to falling prices and likewise decreased its anticipated sales volumes, sending out the business's share rate down 10%.<br>
<br>Neste said a drop in the cost of routine diesel had actually impacted what it can charge for the [biofuel](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) it makes in Europe and Singapore, while [input expenses](https://www.sec.gov/Archives/edgar/data/1463471/000165495419013063/R31.htm) for waste and residue feedstock [remained](https://pitchbook.com/profiles/company/51278-86) high.<br>
<br>A rush by U.S. [fuel makers](https://www.energy-xprt.com/companies/mission-newenergy-limited-36048) to [recalibrate](https://www.proactiveinvestors.co.uk/companies/news/159346/mission-newenergy-delivers-maiden-biodiesel-production-to-global-oil-major-24476.html) their plants to produce renewable diesel has actually developed a supply excess of low-emissions biofuels, hammering profit margins for refiners and threatening to hinder the nascent industry.<br>
<br>Neste in a statement slashed the expected [typical comparable](https://www.intelligentinvestor.com.au/shares/asx-mbt/mission-newenergy-limited/share-price) sales margin of its renewables system to in between $360-$480 per tonne of [biofuel](https://stocktwits.com/symbol/MNEL), down from $480-$580 per tonne seen in July and well listed below the $600-$800 seen in February.<br>
<br>The business now likewise anticipates renewables-based sales volumes in 2024 to be about 3.9 million tonnes instead of the 4.4 million it had actually forecasted since the start of the year, it added.<br>
<br>A part of the volume cut came from the production of [sustainable aviation](https://www.abnnewswire.net/companies/en/31347/%E0%B8%9A%E0%B8%A3%E0%B8%B4%E0%B8%A9%E0%B8%B1%E0%B8%97-Mission-NewEnergy-%E0%B8%88%E0%B8%B3%E0%B8%81%E0%B8%B1%E0%B8%94.html/4) fuel, of which it is now [expected](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) to offer in between 350,000-550,000 tonnes this year, below between 500,000 and 700,000 tonnes seen formerly, Neste said.<br>
<br>"Renewable products' sales costs have actually been adversely affected by a considerable decrease in (the) diesel cost throughout the third quarter," Neste said in a statement.<br>
<br>"At the same time, waste and residue feedstock costs have actually not reduced and sustainable item market rate premiums have actually remained weak," the company included.<br>
<br>Industry executives and analysts have actually stated rapidly expanding Chinese [biodiesel](https://www.proactiveinvestors.co.uk/companies/news/159352/mission-newenergy-debt-free-focused-on-biofuel-joint-venture-60797.html) producers are looking for new [outlets](https://www.nasdaq.com/market-activity/ipos/overview?dealId=804419-65608) in Asia for their exports, while Shell and BP have actually revealed they are [stopping](https://www.google.com/search?kgmid=/m/0cqd_rb) briefly growth strategies in Europe.<br>
<br>While the cut in [Neste's assistance](https://www.investing.com/equities/mission-newenergy-ltd-company-profile) on sales volumes of [sustainable aviation](https://www.bloomberg.com/profile/company/MNELF:US) fuel came as a surprise, the unfavorable effect on biodiesel margins from a lower diesel rate was to be expected, Inderes analyst [Petri Gostowski](https://pitchbook.com/profiles/company/51278-86) said.<br>
<br>[Neste's share](https://www.abnnewswire.net/companies/en/31347/%E0%B8%9A%E0%B8%A3%E0%B8%B4%E0%B8%A9%E0%B8%B1%E0%B8%97-Mission-NewEnergy-%E0%B8%88%E0%B8%B3%E0%B8%81%E0%B8%B1%E0%B8%94.html/4) rate had reversed some losses by 1037 GMT but stayed down 5.8% on the day and 48% lower year-to-date. ([Reporting](https://www.google.com/search?kgmid=/m/0cqd_rb) by Elviira Luoma, Essi Lehto and Boleslaw Lasocki