6.	INVENTORIES

Inventories valued at LIFO (last-in, first-out), consist of the following (in thousands):


	March 31, 2018			December 31, 2017
Finished goods	$	39,788		$	32,986
Raw materials		20,801			19,432

Total FIFO (first-in, first-out) inventories		60,589			52,418
Reserve to adjust inventories to LIFO value		(20,070	)		(20,070	)

Total LIFO inventories	$	40,519		$	32,348

The Company utilizes the LIFO method of accounting related to its wood-alternative decking and residential railing products, which generally provides for the matching of current costs with current revenues. However, under the LIFO method, reductions in annual inventory balances cause a portion of the Company’s cost of sales to be based on historical costs rather than current year costs (LIFO liquidation). Reductions in interim inventory balances expected to be replenished by year-end do not result in a LIFO liquidation. Accordingly, interim LIFO calculations are based, in part, on management’s estimates of expected year-end inventory levels and costs which may differ from actual results. Since inventory levels and costs are subject to factors beyond management’s control, interim results are subject to the final year-end LIFO inventory valuation. There were no LIFO inventory liquidations or related impact on cost of sales in the three months ended March 31, 2018 or 2017.

Inventories valued at lower of cost (FIFO method) and net realizable value consist of $1.9 million and $2.2 million of raw materials at March 31, 2018 and December 31, 2017, respectively. The Company utilizes the FIFO method of accounting related to Trex Commercial Products, Inc.