Beijing: China has become the world's largest stainless steel producer with its output exceeding five million tonnes in 2006.

The output was 60 per cent or three million tonnes more from 2005.

The growth more than quadrupled the world average of 14 per cent projected by the MEPS, a UK steel consultancy.

The world's total stainless steel output was expected to hit 27.8 million tonnes last year, about 3.4 million tonnes more than the previous year.

"China's National Development and Reform Commission attributed the production boom to a wealth of projects approved in 2005, involving Taiyuan Steel, Baosteel and Jiuquan Iron and Steel Group," said sources.

China's stainless steel production capacity reached 12 million tonnes by December 2006. At least 20 new plants will commence production this year.

World demand for the raw material of stainless steel, nickel, has shot up.

Chinese steel plants were expected to consume 200,000 tonnes of nickel this year and 400,000 tonnes in next few years, CRU, a London-based independent consultancy group focusing on metals and energy.