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3 January 2018 HY Corporate Credit HY Multi Sector.Media. Cable & Satellite CIS: Commonwealth of Independent States Another Substantial Driver of the Global Supply Imbalance CIS encompasses Russia and several adjacent nations following the dissolution of the Soviet Union in 1991. During 2016 CIS manufactured 102.4mn mt of steel and consumed 54.7mn mt resulting in a sizeable regional surplus of 47.7mn mt, albeit less than Asia's 63.5mn mt of excess production. We have bifurcated CIS into two sub-sectors below to better analyze the underlying data. ▪ Russia manufactured 70.8mn mt of crude steel against apparent demand of 42.4mn mt resulting in a national steel surplus of 28.4mn metric tonnes. e CIS (ex-Russia) manufactured 31.6mn mt of crude steel against apparent demand of 123mn mt resulting in 19.3mn mt of additional steel. Figure 21. CIS Supply Demand f0011•,:, of me Vie WilliW;S) Global Motel Preduction (Sapp%) 2007 2006 2009 2010 2011 2012 2013 2014 2018 2016 %Global Rums 72.387 68.510 60,011 66.942 68.852 70,208 68.006 71.461 70,898 70.806 4% % t Yo Y 25 .5T.. .W, 72% E., 2% 4% .I% 0% OS (ex Runt& 51,782 46835 37.650 41258 43,811 401522 39,400 34,615 30,654 31.802 2% % t Yu Y 7% .11% .19% 9% 0% .7% .$4. .12% 1% CIS 124,161 114,345 97391 106500 112313 110,738 109,401 106,079 101,552 102,410 6% %A YoY 0% .4% -15% 11% 4% -2% -2% -2% -4% 1% Global Pal Colmemption (Dhonend) 2007 2008 2006 2010 2011 2012 2013 2014 2015 2/316 % Olobel Aussie 48,959 40,898 28.477 41,444 47.901 49.480 49,671 49,263 40650 42.462 9% , .i. Ye V .13% 404 777'4 Y4 0% -7% • ID"- as (ex Quail.) 10299 16.139 12.275 14,032 15,257 16.191 18,787 14039 12.107 12,265 1% % •'. Ye Y 79% -24'. 744 6'. 4% -7t7- 74 PS 65.291 57,035 40.752 56.#1743 63233 45,679 06/130 43,352 56,705 54.737 3% %.1 YoY 14% •73% •204 38% 14% 4% 1% .5% •f0% -3% Global Slid SIMPIYMontind WOO.) 2007 2009 2008 2010 2011 2012 2013 2014 2015 2014 Russia 730153 27,614 31.634 25,451 20,971 20.721 19.337 22.204 20.940 23,356 Other OS In Aussie) 33483 29.630 23405 27.226 24354 24.333 22.633 20319 16.507 19,317 CM 53,311 57.310 56.939 62,724 49,426 45.059 41.970 42.727 44)347 47,073 atere °MUM* Bark Okorton Fyne LP Me %WV ken' Assercen Currencies in the countries that encompass the developing markets of CIS are characteristically weaker (e.g. Russian Ruble) providing CIS with a competitive advantage over competing countries with stronger currencies (e.g. the United States). This is particularly true with respect to the scrap steel trade, whereby a strengthening U.S. dollar typically results in lower U.S. exports of scrap metal and, alternatively, a weaker U.S. dollar where U.S. scrap exports become more attractive to leading scrap importers such as Turkey. South America (SA) SA steel production was 40.2mn mt versus apparent demand of 40.6mn mt in 2016 resulting in a deficit of -400K mtpa. Brazil is the largest producer in SA, manufacturing 31.3mn mt of steel in 2016 versus consumption of 20.2mn mt. 'Figure 25: South American Supply Demand (000's of metric tonnes) Global Meet Production Mopply1 2007 2005 2009 2010 5/11 2012 2013 2014 2016 2016 % Global South Amok* 45231 47,490 37,775 43.858 46164 46,379 45.622 45,043 43,599 40.219 2% % A YoY 0% -2% -20% 10% 10% 4% -V% -2% -3% -11% Global SOS Consuinodost (Demand) 2007 2006 2006 2010 2011 2012 2013 2014 2015 2016 % Global South America 43,303 46,644 35,445 47.746 50,544 51,723 54,516 51,215 47,423 40017 2% %.1 YoY 70% 5% -24% 35% 0% 2% 5% -0% -7% -14% Global Steel Supply/Dimond I000%1 2007 2000 2009 2010 2011 2012 2013 2014 2015 2016 SOinti MARNA 4.929 me 2,130 13395 (24400) 0.3441 01.041 15,172) (5.524) 0SP Cxece Onnefie On. Waenten> Inon.'e lP the 1c060 her? At tocaNal Page 190 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0086749 SDNY_GM_00232933 EFTA01385464