* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm2 (Recasts, updates prices, adds details)
LONDON, July 27 (Reuters) - Copper rose on Thursday towards the high of more than two years hit in the previous session as the dollar weakened and investors remained upbeat about the outlook for Chinese metal demand, while tin surged on talk of shutdowns in China.
The dollar sank to a 2-1/2 year low on Wednesday after the U.S. Federal Reserve noted weakness in inflation more explicitly than before, tempering the outlook for rate rises. A weak dollar makes metals priced in dollars cheaper for non-U.S. investors.
"The move today is more dollar driven ... (though) optimism over demand in China has been the key driver ever since we got those stronger GDP numbers a few weeks ago," ING commodities strategist Warren Patterson said.
"Shorts have had to come in and cover so it's exaggerated the move higher. I think we do need to see some consolidation around these levels," he said.
* COPPER: London Metal Exchange copper rose 0.4 percent to $6,355 a tonne by 1117 GMT. That followed a 1.7 percent rise in the previous session, when the metal hit its highest since May 2015 at $6,400 a tonne.
* TIN: LME tin soared 1.9 percent, having struck its highest since January at $20,785 a tonne on market talk of shutdowns in China's largest tin producing region due to environmental concerns.
* CHINA DEMAND: Earnings for China's industrial firms surged 19.1 percent in June from a year earlier, accelerating from May in a sign economic momentum remained solid despite rising borrowing costs.
China accounts for nearly half of global copper consumption which is estimated at 23 million tonnes this year.
* CHINA SCRAP BAN: China may ban imports of some scrap metal, including copper, from the end of 2018. However, metals researcher Antaike said the ban was unlikely to affect the 1 million tonnes of imports that market participants were speculating could be impacted.
* METALS OUTPUT: Global miner and trader Glencore said copper output for the first half fell 9 percent, nickel production dropped 10 percent while zinc output jumped 13 percent.
The firm cut its full-year production forecast for copper, lead and nickel following the first-half falls, and also lowered its target for zinc because it expects to complete the sale of two zinc mines this year.
RUSAL: Russia's Rusal said it expected oversupply in China's aluminium market to narrow in the second half, leading to a "much tighter market" for 2018. It also expected another 2-3 million tonnes of operating capacity to be shut by year-end.
(Additional reporting by Melanie Burton; editing by Susan Thomas and David Clarke)