Note 3: Inventory

Our inventory consists of raw materials, primarily comprised of ferrous and non-ferrous scrap metal and alloys such as nickel, chrome, molybdenum, manganese and copper. Our semi-finished and finished steel products are work-in-process in various stages of production or are finished products waiting to be shipped to our customers. Inventory is stated at the lower of cost or market with cost principally determined on a weighted average cost method. Such costs include the acquisition cost for raw materials and supplies, direct labor and applied manufacturing overhead. We assess market based upon actual and estimated transactions at or around the balance sheet date. Provisions are made for slow-moving inventory based upon management’s expected method of disposition. Operating supplies are primarily comprised of forge dies and production molds and rolls that are consumed over their useful lives. Inventories consisted of the following:



	March 31,		December 31,
(in thousands)	2014		2013

Raw materials and starting stock	$	8,178	$	6,848
Semi-finished and finished steel products		75,924		69,333
Operating materials		8,825		8,463

Gross inventory		92,927		84,644
Less: inventory reserves		(1,749)		(2,051)

Total inventory, net	$	91,178	$	82,593