EFTA01385465

3 January 2018 HY Corporate Credit HY Multi Sector,Media, Cable & Satellite North America (NA) NA produced 111 mn mt of steel in 2016 versus apparent demand of 152mn mt. ▪ The U.S. manufactured 78.5mn mt of steel against apparent demand of 102.6mn mt resulting in a steel deficit of 24.0mn metric tonnes in 2016. • NA (ex-U.S.) produced 32.1mn mt of steel versus apparent demand of 49.5mn mt resulting in a steel deficit of 17.3mn mt during 2016. Figure 26: North American Supply : Di:stand (000's of metric tonnes) ttlr iarlia llWVISIY) 2007 2006 2006 2010 2011 2012 2013 2014 2015 2016 % Global ete* 98.101 91.8% 59,394 90.4% 86.399 88.695 156.978 88.174 717846 78.405 5% 44.1 VOY cow Welt Anoka 0% 34,617 .41., .35% 3844 33243 24,386 31,061 7.:,, 32.217 3% 32,691 .2-,. 32103 et, 32.919 37.093 32.149 2% %.1 YoY 3% 4% -27% 27% 4% 2% .2% 3% O", Meth ARAMs 132,616 125,136 03,772 trues 112675 121,506 116276 121403 110,934 110124 7% 56,1 YeY 1% 4% -32% A% 0% 2% -2% 2% -9% 0% 002.2521162VMM0070 Una nifff'ENTIFf-M144246155N52112010 -3711 - 012 20U 2014 ' 201 GERM United States 120,361 110,500 68.400 32400 101,000 101.303 106,300 121,600 106.303 102.570 6% %A Y01, • 10% 4% .37% AR% 9% 7% 74% -II% -5% Other North America 45,526 44.033 29400 32403 41,452 46.165 43203 47.974 47,076 48.456 3% % .. Yu Y .4% 4% 42% 31% 7% 9% .4% /1% .2^4 5% North America 157.207 154,500 39200 131,303 142,452 153465 148,603 teens 165476 162.026 3% %.1 YoY -9% -a% 49% 32% 9% 9% 4% 73% .9% -2% Obbal $1.41 Supply/0nel MAO 2007 2000 2006 2010 2011 2012 2013 2014 201$ 2016 United Statet 122.200) 00.665/ (10.016) (11,9061 114.602) (19.606) (19,4221 (33.4261 (29,4661 124.0961 Other North America iect U.S.) 112,306) I10231) (6,412I 94341 51,175) I12474)) I 11,103I P 5,0562 c144 03j 07,3072 NORTH AMERICA (34,50161 (20.442) (15,428/ 09,7411 12;9777) (31,676) (30225) 14001) (44A34) /41,402 &sae Deursdrs &at Bbarribeg Anima Dia Y WarlitSteeiassocepen Historically, the U.S. has required steel imports to satisfy a portion of domestic market demand. From 2008-2013 steel imports oscillated in a range of 21-27% of U.S. apparent demand. However, beginning in 2014 U.S. mills watched this figure swell to greater than 30%, saturating the market with excess supply to the detriment of prices and capacity utilization. In the charts below, Figure 27 illustrates the increase in steel imports from 2014-2016, while Figure 28 shows capacity utilization at U.S. mills. Looking back to November 2015, following several sequential months of elevated levels of imports, the U.S. steel industry became oversupplied causing capacity utilization to decline precipitously. This eventually spurred a governmental review of steel trade practices that resulted in the enforcement of trade tariffs to deter unfairly-traded imports sold into the U.S. market. Maintaining consistent levels of steel imports is vital to the health of the U.S. steel industry. While some tariffs have been enacted to dissuade countries from inundating the U.S. with excess steel, we feel more protections are necessary going forward to prevent a sudden, unexpected surge of imports. Figure 27. U.S. Steel Imports as % of Apparent Demand 140 33% 2% 120 22% 30% 23% 100 — Appease Dread lemons —% Impested scary Druteche Sant us Oeperintert oMlmwc41M Mr& An Alsealeco Deutsche Bank Securities Inc. Figure 28: AIS( Capacity Utilization at Domestic 904. *0% 70% 00% 50% 40% 30% 201. 10% o% am Capacity Utillas6on —4,44.31444 a.0 YoY Surto Owayaeweint Obomewpfinarectlii dearraara tenant Far moan Weil a. try 0% 5.. • 15% •20% Page 191 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0086750 SDNY_GM_00232934 EFTA01385465