EFTA01385465.pdf

3 January 2018 HY Corporate Credit HY Multi Sector,Media, Cable & Satellite North America (NA) NA produced 111mn 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 in 49.5mn mt resulting a steel deficit of 17.3mn mt during 2016. Figure 26: North American Supply : Di:stand (000's of metric tonnes) ttlr 44.1 VOY iarlia ete* llWVISIY) 2007 98.101 0% 2006 91.8% .41., 2006 59,394 .35% 2010 90.4% 3844 2011 86.399 7.:,, 2012 88.695 3% 2013 156.978 .2-,. 2014 88.174 et, 2015 717846 2016 % Global 78.405 5% cow Welt Anoka 34,617 33243 24,386 31,061 32.217 32,691 32103 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 AnimaDia 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 preventa sudden, unexpected surge of imports. Figure 27. U.S. Steel Imports as % of Apparent Demand Figure 28: AIS( Capacity Utilization at Domestic 140 33% 904. a. 2% *0% 120 22% try 70% 100 30% 00% 0% 50% 23% 5.. 40% 30% 201. • 15% 10% o% •20% am Capacity Utillas6on —4,44.31444 a.0 YoY — Appease Dread lemons —% Impested scary Druteche Sant us Oeperintert oMlmwc41M Mr& An Alsealeco Surto Owayaeweint Obomewpfinarectlii dearraara tenant Far moan Weil Deutsche Bank Securities Inc. Page 191 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0086750 CONFIDENTIAL SDNY_GM_00232934 EFTA01385465