Based on current International Monetary Fund (IMF) projections, the estimate for global GDP growth has been reduced to 3.5 percent in 2012, representing the second downward revision to growth estimates this year. The IMF highlights that the global economic recovery has weakened considerably and continues to face further downside risks. The IMF notes that the European debt crisis continues to be one of the largest risk factors, particularly as growth momentum slows in emerging markets, including China, Brazil and India. The IMF also notes that momentum appears to be slowing in the United States, a region that was previously forecast to experience more robust growth. Weaker growth is now forecast for both advanced and key emerging economies in the second half of 2012. As a result, the IMF also cut its 2013 global GDP growth forecast to 3.9 percent.

Uncertainty in the global economies has impacted steel customer sentiment and production rates. According to the World Steel Association and other published reports, global steel production, excluding China, has declined one percent during the first half of 2012. Given the particularly weak environment in Europe, steel production in the European Union is down over five percent during the same period. As a result, we continue to see a difficult demand environment from our global customers, especially in Europe.

Given the waning expectations for global economic recovery and a weaker demand environment, we now expect full year EBITDA to be in the range of $235 million to $255 million. In the third quarter of 2012, we are targeting EBITDA to be in the range of $55 million to $65 million.

We have continued to take actions to manage costs and effectively allocate capital in a difficult operating environment. As a result, we have reduced overhead expense to approximately $160 million for the full year 2012, a decrease of $10 million or six percent versus our previous target. We are also further reducing our capital expenditures to be in the range of $120 million to $130 million, representing an approximately $25 million or more than 15 percent reduction from our original mid-point target established in February this year.

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