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3January 2018 HY Corporate Credit HY Multi Sector,Media. Cable & Satellite The Middle East & Africa Similar to Oceania. the Middle East and Africa account for small percentages of global supply and demand. Both appear to import the majority of their steel needs from geographies with excess crude steel production, like China and CIS. Figure 33: The Middle East & Africa, Supply / Demand (000's of metric tonnes) Global Send Production (Supply) 2007 2000 2000 2010 2011 2012 2013 2011 2015 20101i Global Middle East 16,452 18647 17,766 20000 23,230 24.979 26,967 29,986 29,429 31.481 2% % .1 YoY 72% 1% 7% 13% 18% 8% 8% 11% 7% Alike 18.075 10,970 15,400 16825 15.098 15.330 15,909 14,895 13.701 13.099 1% % 1 YoY 9% -9% -9% 8% -6% -2% 4% -4% Global Steel COMIUMPliOn (Demand) 2007 2000 2000 2010 2011 2012 2013 2014 2015 2010 ti. Global Middle East 48,378 64205 50.098 52.871 56,119 55901 57.510 59204 58,483 57.728 4% ". i YoY 20% 12% -8% 6'. 8% -1% 3'. 3% -7% .1% Alnca 24.992 29.627 32666 30231 32,068 35,860 39,877 40707 42,032 40.885 3.1. % 1 YoY 3". 19". 10'. .7'. 6'. 12'. IP. 3`. Global Steel Supply/Demand WOO sl 2007 2008 2009 2010 2011 2012 2013 2014 2015 2010. MIDDLE EAST ( 31,926) 137,818) (32.3301 132,871) (320391 (30,6821 (30.5431 129.218) (29.054) (26.247){ AFRICA (6,3171 (12.067) (17.266) (13,6081 116.372) 120.524/ (23,7141 (25.8221 (28.3311 127.7801 Seurat Nasal* Bank likeittirg Mann. LP. tit* Mad Awl Asscoabon • The Middle East produced 31.5mn mt of steel versus apparent demand of 57.7mn mt resulting in a 2016 steel deficit of 26.2mn metric tonnes. • Africa manufactured 13.1mn mt of steel compared to apparent demand of 40.9mn mt resulting in a 27.7mn mt steel deficit in 2016. Key Takeaways Having now analyzed the steel trade on both a regional and country-specific basis, we have identified a few key themes to keep in mind when considering trends in the global steel markets: • The global steel industry is characteristically oversupplied largely due to production in excess of demand primarily emanating from Asia and CIS; • While steel is not a "true" commodity but rather an alloy, it trades globally like a commodity meaning that differences in quality are largely negligible for most of the generic products (hot-rolled coil, cold-rolled coil); • According to our analysis, nations that appear responsible for producing more steel than demand warrants in their countries include China, Japan, South Korea, Russia and several other former Soviet countries in the CIS; • Disparities in global steel prices bring about an arbitrage opportunity for countries able and willing to ship steel to healthier markets with superior pricing than their own domestic market; • NA and the EU have become target markets to dump excess steel and are now focused on combating incoming imports by way of tariffs and duties; • Turkey is the largest importer of scrap steel globally while the U.S. is the largest exporter; Turkey has historically imported one-third of U.S. scrap exports, hence directionally investors should look to trends in Turkey to analyze the supply / demand balance in the global scrap steel trade; and, • Steel prices in a given market reflect regional relationships between supply and demand and may differ meaningfully from market to market. Page 194 Deutsche Bank Securities Inc. CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086753 CONFIDENTIAL SDNY_GM_00232937 EFTA01385468