While maintaining a &ldquo buy&rdquo rating for Fortress Minerals, Phillip Securities has raised its target price for the iron ore mining company to 81 cents from 64 cents previously.

This comes after Fortress posted a stellar set of results for 1QFY2022 ended May 31.

According to Phillip, the company is expected outperform ahead amid strong iron ore prices and favourable demand and supply dynamics.

The brokerage has raised its FY2022 earnings forecast for the company by 41%.

Citing figures from the World Steel Association, Phillip notes that global steel demand will grow 5.8% in 2021 to 1.87 billion tonnes, after dipping 0.2% in 2020.

Global steel demand will further grow 2.7% to 1.92 billion tonnes in 2022, it adds.

On the other hand, global iron-ore supply is facing uncertainties.

Major Brazilian iron-ore producer, Vale, recorded a q-o-q decline in iron ore sales of 28.4%, due to operational issues and maintenance at its S11D mine.

As such, Phillip has now raised its average selling prices forecast by 37% to US$140 per dry metric tonne.

Fortunately for Fortress, the company&rsquo s mining operations are gradually reopening despite the Covid-19 restrictive measures imposed by the Malaysian government.

Certain states, such as Terengganu and Pahang where the company&rsquo s mines are located, have moved to Phase 2 of a 4-phase National Recovery Plan.

Phillip points out that the company&rsquo s Bukit Besi mine has gradually returned to &ldquo normalcy&rdquo , after resuming at an approved worker capacity of 80% on July 5.

&ldquo Catalysts are expected from an increase in production and strong iron-ore prices,&rdquo Phillip analyst Vivian Ye writes in a note dated July 16.