EFTA01385467

3 January 2018 HY Corporate Credit HY Multi Sector,Media, Cable & Satellite The European Union (EU) & Other Europe The EU manufactured 162.0mn mt of steel and consumed 172.1mn mt in 2016 resulting in a steel deficit of 10.0mn nit. Like North America (NA), the EU is vulnerable to unfairly-traded steel imports and steelmakers in the region have also sought refuge from the government to enforce tariffs to counteract these imports. The EU was slower than the U.S. to respond to surging steel imports before adopting levies against offending nations. Germany (42.0mn mtpa) and Italy (23.3mn mtpa) represent the largest EU steelmakers. Global Steel Production I Supply) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 '. Global European Union 210.262 198 708 139,435 172.911 177790 168,587 186,357 169 296 166.118 102.024 10% °. t YoY 20% -5'. -30'e 24% 3% 5% '7'. 24. -2% Other Europe 30.533 31.621 29,034 33,651 39.080 39,918 38.627 38,374 35.777 37.651 2% % 1 YoY .6% en 16% 76% 2% .1°. 5% Global Steel Consumption (Demand) 2007 2000 2000 2010 2011 2012 2013 2034 2016 2016 %Global European Union 223.637 207.220 129947 162,413 172.618 154,111 157.003 162.314 167.889 172.108 11%. I . 1 YoY 7".. -31'. 25' 6'., 'Ira 2•, 3", 3', 3"n Other Europe 32,103 29.441 24,589 30,827 34.654 303.126 39.143 39.276 42.450 43.190 3': '2 1 YoY 8". - IV, 25°. 13% 4'' 8., 0". it, 2'..., Global Stim4Supprir/Demand IMO a) 2007 2008 2000 2010 2011 2012 2013 2014 2015 2016 EUROPEAN UNION 113.376) (8.614) e.aas 10.436 6,172 14.478 9.354 6.984 (1.753) 110.0841 OTHER EUROPE (1,5701 2.180 4,445 3.024 4,420 5.792 (516) (902) 16.6731 (5.539) Cure Do44.4ne See* 51Oombefo Nurse tP tZe Mont' Re.' 4000a, x, Other Europe produced 37.6mn mt of steel in 2016 versus apparent demand of 43.2mn mt resulting in a 5.5mn mt deficit. The large majority of crude steel production in the geography occurs in Turkey, which produced approximately 33.1 mn nit in 2016 versus apparent demand in Turkey of 36.2mn mt. Turkey is significant in that approximately 70% of its steelmaking capacity is by way of electric arc furnaces (EAF) that manufacture steel from recycled scrap. Turkey is the largest global importer of scrap steel whereas the U.S. is the largest exporter. Turkey is also the top importer of U.S. scrap, consuming —30% of U.S scrap exports historically. In recent years a strong U.S. dollar has hindered Turkish demand for U.S. scrap and led Turkey to procure scrap from countries with weaker currencies like the Russian Ruble. In fact, in 2015 Turkey actually imported steel billets from China to melt down in EAF's due to cost advantages. Turkey is the key player to keep an eye on in the global scrap trade. Oceania Oceania, which includes Australia and New Zealand, makes up less than 1% of global supply / demand for steel and is therefore less of a focus market. i000's of me(iic tonnes) 2011 2012 2013 2014 2015 2016 % Global 32' Oceania Supply I Demand Global Stal Production (Supply) 2007 2006 2000 2010 Oceania . 1 YoY 8,784 I". 8.424 4% 6,014 -29'. 8.149 36', 7.248 -11% 5.806 -20"a 5588 .4'. 5.488 -244 5,718 5`,.) 5.836 0% 2% Global Steel Consumption (Demand) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2018 % Global Oceania YoY 9,435 9.545 1', 8782 -29'. 8,838 30% 7,745 -12% 8271 7,527 -9'. 8,397 Its 8225 7.710 0% Global Steel Supply/Demand 1000 OCEANIA 2007 18511 2008 (3121) 2009 (768) 2010 18891 2011 (4971 2012 (2,466( 2013 (1.9391 2014 12.9311 2015 (2.507) 2016 11.8741' Sone Dostto,* &int tbecnorp /rya ev, r.44.• 4, Deutsche Bank Securities Inc. Page 193 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086752 CONFIDENTIAL SDNY_GM_00232936 EFTA01385467