INVENTORIES: Inventories consist of approximately 43% raw materials and supplies and 57% finished and semi-finished products at July 2, 2011 (41% and 59%, respectively, at December 31, 2010). Nucor's manufacturing process consists of a continuous, vertically integrated process from which products are sold to customers at various stages throughout the process. Since most steel products can be classified as either finished or semi-finished products, these two categories of inventory are combined.

Inventories valued using the last-in, first-out (LIFO) method of accounting represent approximately 50% of total inventories as of July 2, 2011 (45% as of December 31, 2010). If the first-in, first-out (FIFO) method of accounting had been used, inventories would have been $683.4 million higher at July 2, 2011 ($620.4 million higher at December 31, 2010). The allowance to reduce inventories to the lower of cost or market was $5.0 million at July 2, 2011 ($2.9 million at December 31, 2010).