<SEC-DOCUMENT>0001292814-18-002918.txt : 20181004
<SEC-HEADER>0001292814-18-002918.hdr.sgml : 20181004
<ACCEPTANCE-DATETIME>20180824115342
<PRIVATE-TO-PUBLIC>
ACCESSION NUMBER:		0001292814-18-002918
CONFORMED SUBMISSION TYPE:	CORRESP
PUBLIC DOCUMENT COUNT:		2
FILED AS OF DATE:		20180824

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			NATIONAL STEEL CO
		CENTRAL INDEX KEY:			0001049659
		STANDARD INDUSTRIAL CLASSIFICATION:	STEEL WORKS, BLAST FURNACES & ROLLING & FINISHING MILLS [3310]
		IRS NUMBER:				000000000
		FISCAL YEAR END:			1231

	FILING VALUES:
		FORM TYPE:		CORRESP

	BUSINESS ADDRESS:	
		STREET 1:		RUA LAURO MULLER
		STREET 2:		116 36 ANDAR
		CITY:			RIO DE JANEIRO RJ BR
		STATE:			D5
		ZIP:			00000
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<TYPE>CORRESP
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<P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><I><FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></I></FONT></I>&nbsp;</P></DIV>

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<P style="MARGIN: 0in 0in 12pt"><B><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">VIA EDGAR TRANSMISSION</FONT></U></B></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Mr. Ameen Hamady</FONT></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Mr. Terence O&#8217;Brien<BR>Division of Corporation Finance</FONT></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Office of Manufacturing and Construction <BR>United States Securities and Exchange Commission<BR>100 F Street, N.E.<BR>Washington, D.C. 20549-4631</FONT></P>

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<P style="MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Re:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; National Steel Company<BR>Form 20-F for the fiscal year ended December 31, 2017<BR>Filed on May 1, 2018</FONT></B></P>

<P style="MARGIN: 0in 0in 0pt 1in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">File No. 001-14732</FONT></B></P>

<P style="MARGIN: 0in 0in 0pt 1in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Response to Staff Comment Letter Dated July 27, 2018 </FONT></B></P>

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<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Dear Mr. Hamady and Mr. O&#8217;Brien:</FONT></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Reference is made to the comment letter from the staff (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Staff</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;) of the United States Securities and Exchange Commission (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">SEC</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221; or the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Commission</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;) received by Companhia Sider&#250;rgica Nacional (&#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">National Steel Company</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221; or the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Company</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221; or &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">CSN</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;) on July 27, 2018, regarding the Company&#8217;s annual report on Form 20-F for the fiscal year ended December 31, 2017, filed on May 1, 2018 (the &#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">2017 Form 20-F</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;). For your convenience, we have reproduced the Staff&#8217;s comments in italics and have provided responses immediately below.</FONT></P>

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<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The Company will improve its disclosure in accordance with the additional information provided herein in future filings.</FONT></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">SEC Comment No. 1.</FONT></B></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">8.a) Direct equity interests in subsidiaries, joint ventures, joint operations, associates and other</FONT></U></P>

<P style="MARGIN: 0in 0in 0pt"><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">investments, page FS-29</FONT></U></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">We note your tabular disclosure for the various investments accounted for under the equity method and the various joint ventures and joint operations that the company is a part of. As it relates to your investment in Transnordestina Logistica S.A., please clarify what the fair value allocated to TLSA in loss of control is intended to represent. In that regard, please tell us and further expand your disclosures to clarify the facts and circumstances that may have resulted in the loss of control of your TLSA investment and the related accounting treatment and authoritative literature you relied on.</FONT></I></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20th Floor </FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Faria Lima Financial Center</FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">04538-132 &#8211; S&#227;o Paulo &#8211; SP</FONT></P></FONT></H1></TD></TR></TABLE></DIV>

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<P style="MARGIN: 0in 0in 0pt"><FONT style="text-underline: none" color=black face="Times New Roman"><FONT><FONT lang=EN-US style="FONT-SIZE: 8pt; TEXT-DECORATION: none; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; FONT-STYLE: normal" color=black face="Times New Roman">#4833-8023-9216v17</FONT></FONT></FONT></P></DIV>

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<P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><I><FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></I></FONT></I>&nbsp;</P></DIV>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Response to Comment No. 1. </FONT></B></P>

<P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></B>&nbsp;</P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The fair value allocated to TLSA in loss of control on page FS-29, in the amount of R$271 million, represents the original fair value recorded in 2013 (R$659 million) </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">less</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"> a R$388 million impairment loss in 2016, as explained in item 8.d. of the 2017 Form 20-F, pages FS-35/36. </FONT></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">As disclosed in CSN&#8217;s financial statements in its annual reports on Form 20-F for the fiscal years ended December 31, 2013 and December 31, 2014, the fair value was allocated to TLSA upon CSN&#8217;s loss of control in 2013. This loss of control occurred when TLSA&#8217;s shareholders approved TLSA&#8217;s disproportional spin-off, thereby segregating Railway System I (&#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">RS I</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;) and Railway System II (&#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">RS II</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;), which had formerly comprised the Northeast Railway System concession.</FONT></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">As a result of the spin-off, RS I assets were merged into Ferrovia Transnordestina Log&#237;stica S.A. (&#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">FTL</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">&#8221;), a subsidiary of CSN, and RS II assets remained under TLSA. </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Pursuant to an agreement among TLSA&#8217;s shareholders executed on the spin-off date, TLSA became a joint venture subject to joint control of CSN and one of the Brazilian government entities comprising a public block. CSN and the public block carry joint rights in TLSA&#8217;s material company decisions and ordinary course of business, including budgeting, internal policies, capital expenditures and debt profile. These joint rights effectively confer veto rights over certain material company decisions.&nbsp;This new control structure resulted in CSN&#8217;s loss of control over TLSA, pursuant to criteria set forth in </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">IFRS 10 &#8211; Consolidated Financial Statements</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">, and triggered the recognition of the fair value allocated to TLSA in loss of control.</FONT></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">Upon the spin-off, as of December 31, 2013, in accordance with paragraphs 25, B97-B99A, of IFRS 10, CSN deconsolidated all TLSA assets, liabilities and non-controlling interests, and began recognizing its remaining interest in TLSA as an equity method investment, initially measured at fair value as of the spin-off date pursuant to guidance in </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">IFRS 13 &#8211; Fair Value Measurement</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">, and subsequently pursuant to </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">IAS 28 &#8211; Investments in Associates and Joint Ventures</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">. </FONT></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">In its annual report on Form 20-F for the fiscal year ended December 31, 2018, CSN will begin to present the fair value in the same line item as the TLSA investment balance (separate column) and expand its disclosures regarding the historic information related to the corresponding fair value and any impairment loss recorded.</FONT></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">TLSA remains a pre-operational entity and its concession period is set to expire at the end of 2057.</FONT></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">Fair Value of CSN&#8217;s Remaining Interest in TLSA</FONT></I></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">The Company determined the fair value of its remaining interest in TLSA in accordance with </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">IFRS 13 &#8211; Fair Value Measurement</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">. The Company used the income approach technique to determine the fair value of the future cash flows from investments in and net revenues generated and expenses incurred by the RS II, considering (i) TLSA&#8217;s business plan, which includes system capacity volumes for each type of good transported and market prices and conditions; (ii) TLSA&#8217;s concession agreement&#8217;s expiration in 2057; (iii) the cap on the rate of return established in TLSA&#8217;s concession agreement of 6.75% </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">per annum</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">, plus </FONT>


<FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">inflation, as calculated by the Brazilian National Index of Consumer Prices (</FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">&#205;ndice Nacional de Pre&#231;os ao Consumidor</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">),&nbsp;during the life of the concession; and (iv) the concession agreement&#8217;s early expiration if the rate of return reaches the cap before 2057.</FONT></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20th Floor </FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Faria Lima Financial Center</FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">04538-132 &#8211; S&#227;o Paulo &#8211; SP</FONT></P></FONT></H1></TD></TR></TABLE></DIV>

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<P style="MARGIN: 0in 0in 12pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">For your reference, the following table reconciles the gain generated by CSN&#8217;s loss of control in TLSA, as of December 31, 2013, which CSN recorded in its income statement as &#8220;other operating income&#8221;</FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">:</FONT></P>

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   <P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman"></FONT>&nbsp;</P></TD>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Amount </FONT></B></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><I><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(in millions of R$)</FONT></I></P></TD></TR>

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   <P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(+) Fair value of the remaining investment</FONT></B></P></TD>

   <TD style="HEIGHT: 12.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="24%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">1,984</FONT></B></P></TD></TR>

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   <P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(-) Carrying amount of net assets</FONT></P></TD>

   <TD style="HEIGHT: 12.45pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="24%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">1,714</FONT></P></TD></TR>

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   <TD style="HEIGHT: 12.9pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="76%">

   <P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(+) Carrying amount of non-controlling interests</FONT></P></TD>

   <TD style="HEIGHT: 12.9pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="24%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">389</FONT></P></TD></TR>

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   <P style="MARGIN: 0in 0in 0pt"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(=) Gain upon loss of control in TLSA </FONT></B></P></TD>

   <TD style="HEIGHT: 12pt; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="24%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">659</FONT></B></P></TD></TR></TABLE></DIV>

<P style="MARGIN: 0in 0in 10pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman"></FONT></I>&nbsp;</P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">Investment Balance of TLSA </FONT></I></P>

<P style="BACKGROUND: white; MARGIN: 0in 0in 12pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">The following table reconciles the investment balance of TLSA recognized as of December 31, 2012 and December 31, 2013:</FONT></P>

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   <P style="MARGIN: 0in 0in 2.35pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT>&nbsp;</P></TD>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 2.35pt" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Amount<BR></FONT></B><I><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(in millions of R$)</FONT></I></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">TLSA investment balance as of December 31, 2012</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">1,452</FONT></B></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Capital increase</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">153</FONT></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Capital reduction of net assets merged into FTL</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(153)</FONT></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Comprehensive income</FONT></P></TD>

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   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">1</FONT></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Loss for the year</FONT></P></TD>

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   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">(128)</FONT></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">Gain upon loss of control over TLSA</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">659</FONT></B></P></TD></TR>

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   <P style="MARGIN: 0in 0in 2.35pt"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">TLSA investment balance as of December 31, 2013</FONT></B></P></TD>

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   <P style="TEXT-ALIGN: right; MARGIN: 0in 0in 2.35pt" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" color=black face="Times New Roman">1,984</FONT></B></P></TD></TR></TABLE></DIV>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">SEC Comment No. 2.</FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">8.d) Joint ventures and joint operations financial information, page FS-33</FONT></U></P>

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<P style="MARGIN: 0in 0in 0pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Please further tell us and expand your disclosures to discuss the facts and circumstances that resulted in the determination an impairment trigger was present in 2016 that resulted in the evaluation of TLSA&#8217;s own long lived assets. In that regard, please clarify whether, the R$387,989 that was recorded as other operating expenses represented the write down of your investment in TLSA or whether that was the company&#8217;s proportional amount of any impairment loss that was recognized by TLSA. Please tell us how you applied the guidance in paragraphs 40-42 of IAS 28 given that it appears you are accounting for your investment in TLSA as an equity method investment based on your disclosure on page FS-10.</FONT></I></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20th Floor </FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Faria Lima Financial Center</FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">04538-132 &#8211; S&#227;o Paulo &#8211; SP</FONT></P></FONT></H1></TD></TR></TABLE></DIV>

<P style="MARGIN: 0in 0in 0pt"><FONT style="text-underline: none" color=black face="Times New Roman"><FONT><FONT lang=EN-US style="FONT-SIZE: 8pt; TEXT-DECORATION: none; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; FONT-STYLE: normal" color=black face="Times New Roman">#4833-8023-9216v17</FONT></FONT></FONT></P></DIV></DIV>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 10pt"><B><FONT lang=EN-US style="FONT-SIZE: 11pt; LINE-HEIGHT: 115%" face="Times New Roman">Response to Comment No. 2. </FONT></B></P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The R$388 million recorded as other operating expenses in 2016 represented CSN&#8217;s write-down of its investment in TLSA and did not represent CSN&#8217;s proportional amount of any impairment loss recognized by TLSA.</FONT></P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The impairment loss was triggered in 2016 due to (i) additional delays in the RS II stemming from delays in the public block&#8217;s funding as a result of ongoing inspections by governmental agencies (funding would not be granted until completion of the inspections), which delays were not compensated by an extended concession period, and (ii) an increase in the Brazilian long-term interest rate (</FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Taxa de Juros de Longo Prazo</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">) from 5.5% in 2015 to 7.5% in 2016, which increased TLSA&#8217;s cost of financing its loans.</FONT></P>

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<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">As set forth in the Response to Comment No. 1 herein, TLSA is an entity under common control and CSN accounts for its investment pursuant to the equity method and the guidance in IAS 28. The construction of the RS II has experienced delays, and the commencement of its operations, originally scheduled for 2017, has been repeatedly postponed. In 2016, a two-year delay in the commencement of the RS II&#8217;s operations without any extension in its concession period meant CSN had two years less to recover its investment in TLSA than originally calculated. </FONT></P>

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<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">TLSA&#8217;s management and shareholders, including CSN, have monitored the RS II&#8217;s ability to continue as a going concern, as well as potential impairment triggers on the carrying amounts of recorded assets (investment amounts, including the fair value allocated to TLSA in loss of control). The RS II&#8217;s delays were a potential impairment trigger according to IAS 28, paragraphs 40-42.</FONT></P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">In spite of the RS II&#8217;s delays, TLSA concluded that its discounted cash flow model (&#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">DCF</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;) did not present impairment in its long-lived assets, meaning TLSA remained fully recoverable since 2013 and did not record any impairment loss on its long-lived assets. </FONT></P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">In parallel, CSN tests for impairment in its interest in TLSA annually, considering the guidance in paragraphs 41A and 41C of IAS 28.</FONT></P>

<P style="MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 6pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">In 2016, CSN&#8217;s assessment of potential impairment loss comprised (i) review of TLSA&#8217;s own evaluation of impairment of its long-lived assets under the DCF model and (ii) CSN&#8217;s adjustments to the impairment model prepared by TLSA to reflect the dividend distribution model (&#8220;</FONT><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">DDM</FONT></U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">&#8221;), under which CSN projects expected dividends, pursuant to the profitability set forth in TLSA&#8217;s DCF model. </FONT></P>

<P style="MARGIN: 0in 0in 6pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">As set forth in FS-35/36, CSN followed these steps in its DDM:</FONT></P>

<P style="MARGIN: 0in 0in 6pt 2.85pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">1.</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Review and challenge of TLSA&#8217;s nominal cash flows under TLSA&#8217;s DCF model;</FONT></P>

<P style="MARGIN: 0in 0in 6pt 2.85pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">2.</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">CSN&#8217;s interest in TLSA has been diluted over the years and will be further diluted because the remaining capital contributions scheduled for each shareholder are different until the RS II&#8217;s completion, and CSN has the lowest capital contribution remaining; accordingly, CSN&#8217;s projection of cash inflows from dividends considers its percentage of ownership each year after dilutions, depending on the capital contributions scheduled for each shareholder; and </FONT></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20th Floor </FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Faria Lima Financial Center</FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">04538-132 &#8211; S&#227;o Paulo &#8211; SP</FONT></P></FONT></H1></TD></TR></TABLE></DIV>

<P style="MARGIN: 0in 0in 0pt"><FONT style="text-underline: none" color=black face="Times New Roman"><FONT><FONT lang=EN-US style="FONT-SIZE: 8pt; TEXT-DECORATION: none; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; FONT-STYLE: normal" color=black face="Times New Roman">#4833-8023-9216v17</FONT></FONT></FONT></P></DIV></DIV>

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<P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><I><FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></I></FONT></I>&nbsp;</P></DIV>

<P style="MARGIN: 0.1pt 2.85pt 6pt 35.45pt; TEXT-INDENT: -0.25in"><FONT lang=EN-US style="FONT-SIZE: 11pt; LINE-HEIGHT: normal" face="times new roman">3.</FONT><FONT lang=EN-US style="FONT-SIZE: 7pt; LINE-HEIGHT: normal" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt; LINE-HEIGHT: normal" face="times new roman">Discounting of estimated cash inflows from dividends to present value considering the cost of equity embedded in TLSA&#8217;s weighted average cost of capital, as adjusted by an incremental company specific risk premium.</FONT></P>

<P style="MARGIN: 0.1pt 2.85pt 0pt 0.5in; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt; LINE-HEIGHT: normal" face="times new roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Despite different methodologies, the DCF model and the DDM tend to present similar results, as set forth in paragraph 42 of IAS 28. However, in the case of CSN&#8217;s interest in TLSA, the two models presented different results in 2016 because, due to the above-mentioned delay in the RS II, the cost of equity used in the DDM to discount dividends to present value was significantly higher than the weighted average cost of capital used in the DCF model. Accordingly, in 2016, the DDM presented a lower present value than the DCF, which reduced the fair value amount that CSN attributed to its interest in TLSA.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The following table sets forth CSN&#8217;s position in TLSA as of December 31, 2016, before and after the impairment loss under the DDM: </FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in" align=right><I><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">&nbsp;(in millions of R$)</FONT></I></P>

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   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT></B>&nbsp;</P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">As of </FONT></B></P>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">December 31, 2016</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">Impairment applied (under DDM)</FONT></B></P></TD>

   <TD style="BORDER-TOP: windowtext 1pt solid; BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">As of </FONT></B></P>

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">December 31, 2016</FONT></B></P></TD></TR>

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   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT>&nbsp;</P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">Before impairment</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT>&nbsp;</P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: center; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=center><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">After impairment</FONT></B></P></TD></TR>

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   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">TLSA&#8217;s net equity</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">2,489</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT>&nbsp;</P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">2,489</FONT></P></TD></TR>

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   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">CSN&#8217;s interest in TLSA</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">49.02%</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT>&nbsp;</P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">49.02%</FONT></P></TD></TR>

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   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">CSN&#8217;s investment balance</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">1,220</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman"></FONT>&nbsp;</P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">1,220</FONT></P></TD></TR>

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   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">Fair value </FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">659</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">(388)</FONT></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">271</FONT></P></TD></TR>

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   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; BORDER-LEFT: windowtext 1pt solid; PADDING-RIGHT: 5.4pt" vAlign=top width="35%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">Total CSN balance in TLSA</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">1,879</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="22%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">(388)</FONT></B></P></TD>

   <TD style="BORDER-RIGHT: windowtext 1pt solid; BORDER-BOTTOM: windowtext 1pt solid; PADDING-BOTTOM: 0in; PADDING-TOP: 0in; PADDING-LEFT: 5.4pt; PADDING-RIGHT: 5.4pt" vAlign=top width="21%">

   <P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: right; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in" align=right><B><FONT lang=EN-US style="FONT-SIZE: 9pt" face="Times New Roman">1,491</FONT></B></P></TD></TR></TABLE></DIV>

<P style="PAGE-BREAK-AFTER: avoid; TEXT-ALIGN: justify; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></B>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">CSN performed the impairment test </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">as of December 31, </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" color=black face="Times New Roman">2017, following a similar approach to the one set forth above, and did not recognize additional impairment losses because cash inflows under the DDM model were higher than the carrying amount of CSN&#8217;s investment in TLSA.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></B>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">SEC Comment No. 3.</FONT></B></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><U><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">23. Other Operating Income (Expenses), page FS-72</FONT></U></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></B>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">We note your tabular disclosure detailing the various line items impacting your other operating income and expenses for the periods presented. Please further expand your disclosures to highlight the facts and circumstances that led to the R$755,151 monetary adjustment related to the Eletrobras Compulsory loan. In that regard, please clarify the nature of the arrangement with Eletrobras and the resulting negotiation and/or conflict that resulted in a favorable judicial decision. In your response, please also address how you are accounting for the arrangement with Eletrobras.</FONT></I></P>

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   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Av. Brigadeiro Faria Lima, 3400 &#8211; 20th Floor </FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">Faria Lima Financial Center</FONT></P>

   <P style="TEXT-ALIGN: center; MARGIN: 0in 0in 0pt" align=center><FONT style="FONT-SIZE: 6pt; LINE-HEIGHT: 115%" face="Times New Roman">04538-132 &#8211; S&#227;o Paulo &#8211; SP</FONT></P></FONT></H1></TD></TR></TABLE></DIV>

<P style="MARGIN: 0in 0in 0pt"><FONT style="text-underline: none" color=black face="Times New Roman"><FONT><FONT lang=EN-US style="FONT-SIZE: 8pt; TEXT-DECORATION: none; TEXT-TRANSFORM: none; FONT-WEIGHT: normal; FONT-STYLE: normal" color=black face="Times New Roman">#4833-8023-9216v17</FONT></FONT></FONT></P></DIV>

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<P style="TEXT-ALIGN: right; MARGIN: 0in 0in 0pt" align=right><I><FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></I></FONT></I>&nbsp;</P></DIV>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></B>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Response to Comment No. 3. </FONT></B></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><B><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT></B>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 12pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">From January 1987 through January 1994, electricity costs payable by large industrial plants to power supply distributors included an amount as compulsory loans to Eletrobras at rates that ranged from 10% to 35% </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">per annum</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">. The purpose of these compulsory loans was to promote improvements and expansion of the Brazilian electricity sector.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">When Eletrobras, which has its stock publicly listed in Brazil, repaid the compulsory loans in the form of shares in its stock, its calculation of amounts owed considered only an unofficial inflation index for monetary correction. It did not consider (i) official hyper-inflation indices in Brazil in 1987 through 1994 or (ii) interest on the compulsory loans. This calculation resulted in many Brazilian companies, including CSN, bringing suit against Eletrobras to recover (i) the difference in monetary correction under the official hyper-inflation indices and (ii) interest.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">After a long period of discussions and appeals, in June 2017, the Brazilian Superior Court (</FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Superior Tribunal de Justi&#231;a</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">) entered a final unappealable judgment pursuant to which Eletrobras must pay CSN these additional amounts. In the fourth quarter of 2017, CSN received a legal opinion from its external counsel ratifying management&#8217;s understanding that the receivables from Eletrobras comprising these additional amounts no longer represent a contingent asset, as no further arguments or appeals are available to Eletrobras to revoke or modify the judgment.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Pursuant to </FONT><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">IAS 37 &#8211; Provisions, Contingent Liabilities and Contingent Assets</FONT></I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">, the following two elements are required in order to recognize a receivable and its corresponding income in a company&#8217;s income statement:</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.25in"><B><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">1.</FONT></I></B><B><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I></B><B><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The amount can be reasonably estimated. </FONT></I></B></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The amount of R$755 million recognized in the fourth quarter of 2017 is a fair estimate of CSN&#8217;s claim against Eletrobras and was calculated based on the Brazilian Superior Court&#8217;s methodology set forth in earlier identical cases, which methodology has been accepted by Eletrobras in its reimbursement to other companies. Eletrobras has no argument against the use of this methodology in calculating CSN&#8217;s receivable.</FONT></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">CSN engaged independent experts to ensure that its estimate is fair and in line with the Brazilian Superior Court&#8217;s methodology. CSN applied the guidance established in IAS 37, paragraphs 36, 37 and 38.</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.5in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 0.5in; TEXT-INDENT: -0.25in"><B><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">2.</FONT></I></B><B><I><FONT lang=EN-US style="FONT-SIZE: 7pt" face="times new roman">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </FONT></I></B><B><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">The Company&#8217;s right is certain.</FONT></I></B></P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"></FONT>&nbsp;</P>

<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">CSN based its assessment of certainty on the guidance in IAS 37, paragraph 35. A final unappealable judgment was entered into against Eletrobras and the amount due was calculated based on jurisprudence and an established methodology. CSN has no reason to believe Eletrobras will not be able to settle the reimbursement amount as it has significant provisions in its financial statements to cover its obligations </FONT>


<FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">under the compulsory loans and its financial position reflects sufficient liquidity to pay CSN&#8217;s reimbursement. For these reasons, CSN considers settlement in its favor to be virtually certain.</FONT><B><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman"> </FONT></I></B></P>

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<P style="MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt; BACKGROUND: white" color=black face="Times New Roman">Because both elements required for recognition have been met, CSN recognized its </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">R$755 million </FONT><FONT lang=EN-US style="FONT-SIZE: 11pt; BACKGROUND: white" color=black face="Times New Roman">receivable against Eletrobras in the fiscal year ended December 31, 2017.</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt; TEXT-INDENT: 0in"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">If you have any questions or require any additional information with respect to the above, please do not hesitate to contact Tobias Stirnberg, CSN&#8217;s counsel, at +55 (11) 3927-7702 or Cristina Figueiredo Donnini at +55 (11) 3049-7564. </FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0in 225pt"><FONT lang=PT-BR style="FONT-SIZE: 11pt" face="Times New Roman">Sincerely,</FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0in 225pt"><I><FONT lang=PT-BR style="FONT-SIZE: 11pt" face="Times New Roman">/s/ Marcelo Cunha Ribeiro</FONT></I></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0in 225pt"><U><FONT lang=PT-BR style="FONT-SIZE: 11pt" face="Times New Roman">___________________________________<BR></FONT></U><B><FONT lang=PT-BR style="FONT-SIZE: 11pt" face="Times New Roman">Companhia Sider&#250;rgica Nacional</FONT></B><FONT lang=PT-BR style="FONT-SIZE: 11pt" face="Times New Roman"> <BR>By: Marcelo Cunha Ribeiro</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0in 225pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Title: Chief Financial and Investor Relations Officer </FONT></P>

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<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt"><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">cc: Tobias Stirnberg</FONT></P>

<P style="PAGE-BREAK-AFTER: avoid; MARGIN: 0in 0in 0pt 13.5pt"><I><FONT lang=EN-US style="FONT-SIZE: 11pt" face="Times New Roman">Milbank, Tweed, Hadley &amp; McCloy LLP</FONT></I></P>

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