Copper briefly fell below $US5500 per tonne last week in a global sell-off on the weakness in oil prices and concerns over Chinese growth, which ANZ described as a "perfect storm".
But ANZ said the foundations of the rout appeared to be weak with Chinese trade data showing strong import demand.
"In a world fixated on excess supply, copper stands out as one commodity which should hold up against the malaise that has enveloped commodity markets," ANZ said.
"Despite market expectations, supply growth continues to fall short."
ANZ pointed to Rio Tinto's quarterly report, released Tuesday, which showed a 23% slump in copper production quarter-on-quarter, largely driven by a poor performance at Escondida due to water restrictions.
According to ANZ, it highlighted the issues producers in Chile, the world's largest copper producer, continued to face.
"Chile has been facing looming water and power restrictions for some time, although it was expected that this would impact future projects rather than current operations," ANZ said.
"While the lack of water is starting to impact current uses, it also raises the spectre of future projects being unable to proceed due to a lack of water."
ANZ continues to believe that non-financial constraints will continue to impact copper supply growth.
"Outside of water and power issues in Chile, events such as pit wall failures, strikes, technical problems, lower-than-expected head grades, adverse weather, and slow project ramp-ups are also expected to hinder mine supply in the short-term," it said.
Despite weak sentiment, ANZ said Chinese data painted a rosier picture.
"Growth in apparent consumption in China is hovering around 9% year-on-year and continues an improving trend that first emerged in the middle of 2014," it said.
While some of the increase was likely to be restocking and opportunistic buying, ANZ said inventories only equated to around 3.8 weeks of consumption, below the high of 5.8 weeks seen in 2013.
"With the market oversold and heavily short, the likelihood of a short-term squeeze is rising," ANZ said.
"We would view any further bouts of weakness as prime buying opportunities."
Earlier this week, Standard & Poor's Ratings Services lowered its copper price assumption to $2.70 per pound (around $5950.50/t) in 2015 and 2016, from $3.10 previously.
