* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm2 (Updates throughout, moves dateline from Melbourne)
LONDON, July 26 (Reuters) - Copper prices rose for a fourth day on Wednesday to the highest in more than two years on expectations of strong economic growth in China and news of Chinese restrictions on scrap imports that would increase demand for imported refined copper.
A weaker dollar and forecasts of tight supplies supported price gains, said ABN AMRO analyst Casper Burgering.
But traders said gains faltered once European markets opened as investors cashed in on higher prices.
COPPER: Benchmark copper on the London Metal Exchange was up 0.7 percent at $6,270 a tonne at 1036 GMT, having earlier touched $6,400, its highest since May 2015. The metal used in power and construction has gained more than 5 percent since July 20.
STOCKS: On-warrant stocks available to the market at LME-registered warehouses fell to 221,125 tonnes after 6,425 tonnes of cancellations, but were still up from a low of around 140,000 tonnes in May. <MCUSTX-TOTAL>
CHINA SCRAP BAN: Traders said prices rose on news that China could ban imports of some scrap metal, including copper, from the end of 2018. This would increase demand for imported refined copper.
BAN IMPACT: However, metals researcher Antaike said that the ban would likely affect less than 1 million tonnes of imports that market participants were speculating could be impacted.
CHINA GROWTH: Metals were also supported by a better demand outlook from China after second-quarter growth beat expectations and the International Monetary Fund raised the country's 2017 growth forecast.
DEMAND: China accounts for nearly half of global copper consumption estimated at 23 million tonnes this year.
CHINA MARKETS: China's securities regulator pledged on Wednesday to expand access to capital markets for all types of investors.
U.S. FED: The Federal Reserve is expected to hold interest rates unchanged in a decision to be announced at 1800 GMT.
CURRENCY: The U.S. dollar has weakened for five consecutive months, making dollar-priced metals cheaper for holders of other currencies.
FREEPORT: Indonesia has agreed with U.S. miner Freeport McMoRan Inc that any new operating permit for Grasberg, the world's second-largest copper mine, will only be valid until 2021.
ANTOFAGASTA: Chile's Antofagasta said copper production in the first half rose 7.1 percent and kept its full-year cost and output guidance.
PRICES: Aluminium was up 0.3 percent at $1,935.50 a tonne, nickel was 0.6 percent lower at $9,945, zinc was down 1 percent at $2,807, lead had lost 0.5 percent at $2,307 and tin was 0.1 percent higher at $20,320.
(Additional reporting by Melanie Burton; Editing by Edmund Blair)