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METALS-London copper scales over 2-year high on falling output, weaker dollar

Aug 19 (Reuters) - Copper prices rose on Wednesday, with the London contract hitting a more than two-year high, underpinned by falling output and a weaker U.S. dollar.

Three-month copper on the London Metal Exchange jumped as much as 1.8% to $6,686 a tonne, its highest since June 2018, while the most-traded September copper contract on the Shanghai Futures Exchange advanced 2.3% to 52,220 yuan ($7,544.61) a tonne.

China’s refined copper output in July fell 5.3% from the previous month to 814,000 tonnes, official data showed, as smelters carried out summer maintenance and coronavirus-related mining curbs tightened concentrate supply.

However, January-July output advanced 3.9% year-on-year to 5.63 million tonnes, the data showed.

Meanwhile, the U.S. dollar struggled to recoup heavy overnight losses on Wednesday after it slipped to a 27-month low in the previous session on uncertainties about an economic recovery and the U.S. fiscal stimulus package.

A weaker U.S. dollar makes greenback-priced LME metals cheaper for holders of other currencies.

FUNDAMENTALS

* Rio Tinto cut its refined copper outlook for fiscal 2020 to 135,000-175,000 tonnes from a previous 165,000-205,000 tonne forecast.

* Global copper smelting activity tumbled to the lowest levels in over two years in July, data from satellite surveillance of copper plants showed.

* LME aluminium advanced 0.4% to $1,780 a tonne while ShFE aluminium climbed 1.1% to 14,580 yuan a tonne.

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MARKETS NEWS

* Asian shares climbed to a seven-month peak tracking the S&P 500, which scaled all-time highs driven by ever expanding policy stimulus aimed at cushioning the blow to economies from the coronavirus pandemic.

DATA/EVENTS (GMT)

0600 UK CPI YY July

0900 EU HICP Final MM, YY July

1800 US Federal Open Market Committee will release

minutes from its July 28-29 policy meeting

$1 = 6.9215 yuan Reporting by Mai Nguyen; Editing by Aditya Soni

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