Note 3 - Inventories

6 Months Ended

Jun. 30, 2016

Inventories

Inventories consisted of the following:

	Inventory as of
(in thousands)	June 30, 2016		December 31, 2015
Unprocessed	$	169,296	$	163,942
Processed and finished		41,488		42,703
Totals	$	210,784	$	206,645

The Company values certain of its tubular and pipe products inventory under the last-in, first-out (LIFO) method. At June 30, 2016 and December 31, 2015, approximately $41.5 million, or 19.7% of consolidated inventory, and $42.7 million, or 20.7% 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 six months ended June 30, 2016, the Company did not record any LIFO income or expense as inventory values and quantities at December 31, 2016 are expected to be similar to December 31, 2015. For the six months ended June 30, 2015, the Company recorded $650 thousand of LIFO income as a result of then expected year-over-year decreases in carbon, nickel and base stainless steel pricing and expected lower inventory quantities at December 31, 2015. Of the $650 thousand LIFO income, $400 thousand was recorded in the second quarter of 2015. The LIFO income increased the Company’s inventory balance and decreased its cost of materials sold.

If the FIFO method had been in use, inventories would have been $6.6 million lower than reported at June 30, 2016 and December 31, 2015.