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METALS-Copper hovers near 3-yr top as China growth supports

SYDNEY, Oct 17 (Reuters) - London copper paused for breath near three-year highs on Tuesday as it faced headwinds from a stronger dollar, but renewed optimism over China's economic outlook has lent support to prices.

FUNDAMENTALS

* LME COPPER: London Metal Exchange copper was little changed at $7,128 a tonne by 0125 GMT, following its biggest daily jump in eight months at 3.7 percent on Monday. Prices struck $7,177 a tonne in the previous session, the highest since July 2014.

* SHFE COPPER: Shanghai Futures Exchange copper advanced 2.6 percent to 55,460 yuan ($8,418) a tonne. It earlier hit its highest since Feb 2013 at 55,910.

* SCRAP: The market was keeping an eye on reports that China is enforcing some restrictions on copper imports, including scrap, traders said.

* CHINA ECONOMY: China's producer profits and copper imports have picked up, recent data showed, even as China's economic growth is expected to ease to 6.8 percent in the third quarter from 6.9 percent in the previous quarter due to a cooling property sector and the government's battle against debt risks.

* RIO TINTO: Rio Tinto cut its mined copper production guidance for 2017 to 460,000-480,000 tonnes from 500,000-550,000 tonnes owing to a delayed ramp-up at its Chilean Escondida mine.

* ZINC: SHFE zinc slipped by 1 percent but was still near its highest in 9-1/2 years, having peaked at 26,630 on Oct. 9. LME zinc was also within reach of decade highs at $3,308.75, with supply constrained by China's crackdown on polluters in heavy industry.

* ZINC SPREADS SLACKEN: The premium for cash zinc has slumped in recent days, suggesting that the metal may be delivered against short positions as the main October contract expires this week. LME cash <CMZN0-3> is at a $35 premium against the benchmark, down from $91 on Oct. 12.

* STOCKS: LME zinc stocks have already climbed about 20,000 tonnes since Oct. 5 to the highest since mid July. <MZNSTX-TOTAL>

* USD: Headwinds came from the dollar, which was supported by a rise in Treasury yields following a report that U.S. President Donald Trump was favouring a policy hawk as the next head of the Federal Reserve.

* JAPAN MANUFACTURING: Confidence among Japanese manufacturers rebounded in October to match a peak last seen in mid-2007, a Reuters poll found, further evidence that the economic recovery is gathering momentum helped by a weak yen and strong overseas demand.

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DATA AHEAD (GMT)

0900 Germany ZEW economic sentiment Oct 1000 Euro zone Inflation final Sep 1230 U.S. Import prices Sep 1230 U.S. Export prices Sep 1315 U.S. Industrial production Sep 1400 U.S. NAHB housing market index Oct

PRICES

BASE METALS PRICES 0136 GMT Three month LME copper 7123 Most active ShFE copper 55460 Three month LME aluminium 2143 Most active ShFE 16400

aluminium

Three month LME zinc 3205 Most active ShFE zinc 25815 Three month LME lead 2549.5 Most active ShFE lead 20295 Three month LME nickel 11865 Most active ShFE nickel 94790 Three month LME tin 20730 Most active ShFE tin 147110

BASE METALS ARBITRAGE

LME/SHFE COPPER LMESHFCUc3 669.24 LME/SHFE ALUMINIUM LMESHFALc3 -33.16 LME/SHFE ZINC LMESHFZNc3 616.09 LME/SHFE LEAD LMESHFPBc3 -129.3 LME/SHFE NICKEL LMESHFNIc3 2183.45

($1 = 6.5885 Chinese yuan)

(Reporting by James Regan and Melanie Burton; Editing by Biju Dwarakanath)