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[Deon]

will the dorfs start breaking down existing stacks to get the "raw materials?"

I see the man with a brain here =).
Guys, if you make a reaction to turn a few bolts into stacks, in the most cases the bolts used in reaction will be the ones in your stockpile which are usually closer than those in the field.
So it's useless if you didn't place all the single bolts in the current room with the smelter, which requires almost insane micromanagement.