Copper prices have risen to their highest level in over seven months, supported by signs of resumed Chinese demand and supply disruptions in leading producers Peru and Chile.

"We think the copper market in 2023 is tighter than we expected," said BofA analysts.

"Mined supply is disappointing to the downside on water shortages in Chile, COVID hangover and labour issues."

Supply disruptions in Peru caused by protests, including at operations owned by Glencore, have also impacted copper supply.

BofA's modelled surplus has declined from over 1Mt this year to now around 500,000t with potentially further downside risk.

Global stocks of copper held is warehouses are low.

"On the demand side, the secular theme of ‘decarbonisation means increased metal intensity' is starting to play out." BofA said.

"A pick-up, particularly in China grid investment has more than offset the slowdown in property, and is expected to accelerate in 2023.

"We do expect upside potential in the copper price to continue from here."