The licenses for 71,500 tones of hot rolled coils were issued to Severstal by Russian Ministry of Economic Development and Trade (Mineconomrazvitiya). This product is mainly intended for shipment to Severstal's clients in Germany, France and Italy.

Russian steel-makers planned to begin export to Europe on July 9, when Mineconomrazvitiya and the European Commission signed a new agreement on terms of sales of Russian steel in the EU. However the resumption of sales was delayed for 1.5 months. During that time the government has been working out approaches to distributing quotas among Russia's three exporters.

Because of the delay, Severstal took losses amounting to US $ 168 750, which were connected to securing bank credits necessary to assure planned receipts to accounts.

Just a week ago at the meeting of the Union of Exporters of Steel Products the Government was able to work out a mechanism of distributing export quotas, which took into consideration two approaches. Russian Ministry of Industries and Sciences (Minprom) and Magnitogorsk Steel Mill suggested to use the previously used approach, which is based upon company's production capacities. Mineconomrazvitiya, Novolipetsk Steel Mill and Severstal insisted on taking into account each company's sales volumes in previous years.

According to Dmitry Goroshkov, Severstal's sales director, who took part in the meeting "the Government used a combination of both approaches, however some prevalence was given to companies' sales history". As a result, Severstal's total quota amounted to 357, 000 tones, which is a little lower than the quota calculated by Mineconomrazvitiya (385, 000 tones), but is higher than the quota calculated by Minprom (329, 700 tones). Therefore the quota as compared with the Minprom's offer was raised by 52,300 tones (8,3%).

Overall, the quotas of the Russian steel-makers in 2000 grew by 28% - up to 1.205 million tones. In 2003 - 2004 , the quotas are expected to increase by 2.5 % each year. If Russia revokes export duties on iron-and-steel scrap, the quotas may go up by 12%. By 1 October Russia's three exporters have to decide on their sales volumes in 2003.