Demand for small diameter line pipe, along with some standard pipe in the form of A106, is determined in part by flowlines and sales lines that are required by new drilling. Small diameter line pipe is also used in midstream and downstream applications which are driven by pipeline construction and by development activities including new industrial and residential areas. Our forecast, therefore, is dependent upon our forecast for upstream activity, that will be presented in the OCTG section, for midstream construction, and for facility/development construction of the type that will consume line pipe. This could include hydrocarbon processing, natural gas power generation, and others. We also consider the current industry inventory position which, in general, is lean. Part of the reason for low inventory is the fact that OCTG has been busy and that hot rolled band prices have been high enough, until recently, that some supply has been largely out of the market.
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