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INVENTORIES

6 Months Ended

Jun. 30, 2011

4. INVENTORIES

Inventories include the following:

	June 30, 2011		December 31, 2010
Raw material	$	2,105,510	$	4,023,324
Petrochemical products		4,056,780		1,893,959
Total inventory	$	6,162,290	$	5,917,283

Inventories are recorded at the lower of cost, determined on the last-in, first-out method (LIFO), or market. At June 30, 2011, and December 31, 2010, current cost exceeded LIFO value by approximately $3,372,000 and $2,274,000.

Inventories serving as collateral for the Company's line of credit with a domestic bank were $3.66 million and $4.08 million at June 30, 2011, and December 31, 2010, respectively (see Note 7).

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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