(Yicai Global) July 27 -- China's total industrial profits gained 17 percent in the first half on the back of an increase in producer prices for raw materials and power, official figures show.

Profits at firms with annual sales of more than CNY20 million (USD2.93 million) reached CNY3.4 trillion (USD499 billion) in the six-month period compared with a year earlier, the National Bureau of Statistics said today. The figure stood at CNY658.3 billion for June, up 20 percent, but with the growth rate 1.1 percentage points lower than in May.

Despite the deceleration from May, price inflation clearly underpins the higher figures, with it contributing 0.3 percentage point more in June than in the previous month, according to Dr. He Ping from the NBS's industry office.

The sectors of steel, building materials and oil extraction were key drivers, He added. Just over two-thirds of growth came from oil and natural gas extraction, ferrous metal smelting and rolling, nonmetal mineral products, chemical raw materials and production, as well as the generation and supply of electricity and heat.

Ex-factory prices rose 4.7 annual percentage points last month, with growth 0.6 percentage point higher than in May. Purchase prices rose 5.1 percent annually, with growth 0.8 percentage point higher than in May.

Profit gains in the oil and natural gas extraction sector, the ferrous metal smelting and rolling industry, and the nonmetal mineral products sector reached 3.1 times, 1.1 times and 44.1 percent.

The chemical raw material and chemical products manufacturing industry and the electricity and heat production and supply industry grew their profits by 29.4 percent and 27.4 percent, respectively.

Editor: Ben Armour