Sweden's SKF, the world's biggest maker of industrial bearings, reported a bigger than expected rise in quarterly operating earnings on Thursday and forecast higher year-on-year demand for the third quarter, powered by strong growth in Asia.

The company has been riding a wave of strong industrial demand since the end of 2016, but fears of a global trade war have fuelled investor concerns that the industrial cycle may already be past its peak.

The rival of Germany'sSchaeffler showed scant signs of slowdown with organic sales growth accelerating to 9.0 percent in the second quarter, higher than the 7.3 percent expected by analysts.

Shares in the company were up 5 percent in early trade, outperforming a 0.1% rise for the European industrial sector.

"Our record start to 2018 has continued," Chief Executive Alrik Danielson said in a statement. "Entering the third quarter of 2018, we expect to see continued growth for both our industrial and automotive businesses." 

The Gothenburg-based company said second-quarter operating profit rose to 2.93 billion Swedish crowns ($330.67 million) from a year-ago 2.32 billion, beating a mean forecast of 2.76 billion in a poll of analysts. 

SKF said it expected third-quarter demand to be higher than in the year-ago quarter with significantly higher activity seen in Asia and increases also in both Europe and North America.

Analysts are closely watching inventory levels at industrial firms, wary of the risk of players sitting with too high stock levels if demand turns lower. 

The company said it had adjusted its production rates in the quarter, after accelerating production over the past 18 months to meet the strong market demand. 

"As foreseen and communicated in April, production has been adjusted during the second quarter, to avoid building inventories," SKF said.