Note 3 - Inventories

9 Months Ended

Sep. 30, 2015

3.	Inventories :

Inventories consisted of the following:

	Inventory as of
(in thousands)	September 30, 2015		December 31, 2014
Unprocessed	$	182,441	$	238,226
Processed and finished		46,590		72,882
Totals	$	229,031	$	311,108

The Company values certain of its tubular and pipe products inventory under the last-in, first-out (LIFO) method. At September 30, 2015 and December 31, 2014, approximately $43.5 million, or 19.0% of consolidated inventory, and $46.6 million, or 15.0% of consolidated inventory, respectively, was reported under the LIFO method of accounting. The cost of the remainder of the tubular and pipe products inventory is determined using a weighted average rolling first-in, first-out (FIFO) method.

For the nine months ended September 30, 2015, the Company recorded $1.7 million of LIFO income as a result of expected year-over-year decreases in carbon, nickel and base stainless steel pricing and expected lower inventory quantities at December 31, 2015. Of the $1.7 million LIFO income, $1.1 million was recorded in the third quarter of 2015. The LIFO income increased the Company’s inventory balance and decreased its cost of materials sold.

For the three and nine months ended September 30, 2014, the Company recorded $200 thousand and $600 thousand, respectively, of LIFO expense, as projections at that time anticipated increased pricing of inventory for the remainder of 2014.

If the FIFO method had been in use, inventories would have been $4.9 million and $3.2 million lower than reported at September 30, 2015 and December 31, 2014, respectively.