(Yicai Global) Sept. 28 -- Big Chinese industrial enterprises increased their profits at a steady pace last month but the increases may be tamed later by continuously rising commodity prices.

Profits of firms above designated scale grew 10.1 percent in August from a year ago, according to data released by the National Bureau of Statistics today. From January to August, the figure had jumped by 49.5 percent from a year earlier.

Rising commodity prices were causing the hikes. Evidently, mining companies reported nearly doubled profits while those of raw material producers surged almost 40 percent, much higher than all domestic industrial firms' average.

Sales have so far covered the surging costs. From January to August, the cost of goods sold slid CNY0.7 (11 US dollar cents) to CNY83.7 per CNY100 (USD16) from a year earlier. In August, expenses, which includes all the costs of running a business, dropped CNY0.3 to CNY8.3 (USD1.30) from a year ago, continuing a decline that started early this year.

International oil prices have reached a new high and that is likely to drive the pricing of chemicals, Zheng Houcheng, director at Yingda Securities’s research institute, said to Yicai Global. Meanwhile, prices of nonferrous and ferrous metals are not likely to fall sharply in the short term, Zheng added.

But eventually, the rising costs may affect sales. The sustained recovery of corporate profits is facing many challenges including new Covid-19 cases, high commodity prices, inflated international logistics costs, and chip shortages, which increases costs, said Zhu Hong, senior statistician at the NBS.

Profit growth could slow down slightly amid the delayed economic recovery around the world, said Wu Chaoming, chief economist at Chasing Securities. But the producer price index is likely to remain at a high level and continue to support industrial profits in the second half, Wu added.

Industrial firms’ profit margins are under certain pressures this month due to new Covid-19 outbreaks in some Chinese regions and high raw material prices but the government's steady control over the real estate market and projects with high emissions should help industrial firms maintain high levels of gains, said Zheng.

Editor: Emmi Laine, Xiao Yi