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UPDATE 1-China reviewing copper scrap imports; may call halt in 2018 - notice

(Updates with research institute comments in 7th paragraph.)

BEIJING/MELBOURNE, July 26 (Reuters) - China may ban imports of some scrap metal, including copper, from the end of 2018, according to an industry association notice, which may lead to higher refined copper imports into the world's largest consumer of the metal.

London copper surged to its highest in two years on Wednesday in reaction to the news and Chinese futures climbed to their highest in more than five months.

The review of copper scrap imports is part of a broader crackdown by China authorities on imports of foreign waste as it looks to cut pollution from heavy industries to clear its skies.

The recycling branch of the China NonFerrous Metals Industry Association said on Tuesday that it had received a notice that at the end of 2018 imports of scrap metal including wire, motors and bulk scrap metal will be prohibited, according to a copy of an informal Association message sent to members of its WeChat group reviewed by Reuters.

"The market is reacting to the news about China banning scrap cables, scrap motor and other scrap metals from the end of next year, which could block a lot of copper supply into China," said analyst Li Chunlan at consultancy CRU in Beijing.

China is the world's biggest user and producer of refined copper, accounting for about 45 percent of global demand, but must import any additional needs from mines or scrap merchants. A ban on scrap could mean that it must import more refined copper.

Antaike, a metals research institute under the Association, said that the ban would likely affect less than 1 million tonnes of imports that market participants are speculating could be impacted. That is because the type of scrap affected by the ban only accounted for about 300,000 tonnes of Chinas total 3.35 million tonnes of scrap copper imports in 2016, it said in a report.

China's overall copper scrap imports were 1.85 million tonnes in the first half of 2017 versus refined copper imports of 1.54 million tonnes, customs data showed.

LME copper prices on Wednesday rose as much 2.8 percent to $6,400 a tonne, the highest since May 2015. Prices have risen 4.5 percent in the past two days and are up 14 percent this year.

In China, copper prices on the Shanghai Futures Exchange rallied as much as 5.2 percent to the highest in more than five months and closed at 50,050 yuan ($7,406) per tonne.

China's Ministry of Environmental Protection did not reply to a faxed request for comment.

($1 = 6.7577 Chinese yuan renminbi) (Editing by Christian Schmollinger)