Mission Biotechnologies Sdn. Bhd

Overview

  • Founded Date December 31, 1971
  • Sectors Construction / Facilities
  • Posted Jobs 0
  • Viewed 6
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Company Description

Refiner Neste Warns of Weaker Biofuel Outlook, Shares Drop

Company makes 3rd cut to renewables business outlook this year

Reduces both margin and volume outlook

Weaker diesel market strikes biofuel costs

(Adds analyst, 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 costs and likewise decreased its expected sales volumes, sending out the business’s share price down 10%.

Neste said a drop in the cost of routine diesel had affected 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 eco-friendly diesel has actually created 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 similar sales margin of its renewables system to in between $360-$480 per tonne of biofuel, down from $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 actually forecasted because the start of the year, it added.

A part of the volume cut originated from the production of sustainable aviation 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 said.

“Renewable products’ prices have actually been negatively impacted by a substantial decline in (the) diesel cost throughout the third quarter,” Neste said in a declaration.

“At the same time, waste and residue feedstock prices have actually not reduced and eco-friendly product market cost premiums have actually remained weak,” the company added.

Industry executives and experts have actually stated rapidly broadening Chinese biodiesel manufacturers are seeking brand-new outlets in Asia for their exports, while Shell and BP have revealed they are pausing expansion plans in Europe.

While the cut in Neste’s assistance on sales volumes of fuel came as a surprise, the unfavorable effect on biodiesel margins from a lower diesel rate was to be expected, Inderes analyst Petri Gostowski stated.

Neste’s share price had actually 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)

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