Toss/sell any materials that can be purchased from vendors other than the four expensivish ones from Pasdevillet (Abalathian Mistletoe, Abalathian Rock Salt, Coerthan Tea Leaves, Dravanian Mistletoe).
Sell your HQs, craft with NQs.
If the HQs don't sell for much, downgrade them to NQ to save space.
Don't hoard materials unless you know they're used a lot in the upcoming levels (the most recent ore and log, for example).