China has for the first time become the world's largest stainless steel producer, with its output exceeding five millions tons in 2006, a rise of 60% since 2005, state news agency Xinhua reported.

The rise is a result of a number of projects launched in 2005 by Chinese steel producers including Taiyuan Steel, Baosteel and Jiuquan Iron and Steel Group, Xinhua quoted China's National Development and Reform Commission as saying. The commission is the country's main economic planning agency.

The expansion is set to continue since China's stainless steel production capacity rose to 12 million tons by the end of 2006 and at least 20 new plants are set to commence production this year, the commission said.

The world's total stainless steel output in 2006 was expected to be 27.8 million tons, about 3.4 million tons more than the previous year, Xinhua said.