Oct 21 (Reuters) - London copper rose to a 28-month high on Wednesday on growing hopes for a pre-election U.S. stimulus package, with a weaker dollar and a stronger yuan also lending support.

The White House and Democrats in the U.S. Congress moved closer to agreement on a coronavirus relief bill on Tuesday, which could help a recovery in the world's biggest economy.

Copper is often used as a gauge of global economic health.

The dollar hit a one-month low while the yuan touched a two-year high, making greenback-priced metals on the LME cheaper for buyers using other currencies, especially those in China, the world's top metals consumer.

Three-month copper on the London Metal Exchange rose as much as 1.2% to $6,980 a tonne, its highest since June 2018, while the most-traded November copper contract on the Shanghai Futures Exchange closed at a one-month high of 52,150 yuan ($7,851.20) a tonne.

"Throw in some potential supply disruptions in Chile, (you have a) nice mix to go higher," said commodities broker Anna Stablum at Marex Spectron, referring to recent labour strikes in the world's biggest copper producing country.

"As the situation deteriorates in Europe and the United States with more coronavirus cases, there will be more stimulus needed and this is helping commodities higher," she added.

FUNDAMENTALS

* The ShFE-LME cash copper arbitrage was last at 70.83 yuan-a-tonne premium, its smallest since Sept. 21.

* Shortages of aluminium for financing deals have significantly boosted prices of metal that can be bought for spot delivery or on physical markets against those for longer dated maturities.

* China's refined copper output rose 10.3% year-on-year in September, with smelters' average daily production recovering to the record level registered before the coronavirus outbreak.

* LME nickel hit an 11-month high at $16,130 a tonne, and lead advanced 2% to $1,801.50 a tonne. ShFE nickel increased 1.8% to 121,730 yuan a tonne and ShFE zinc climbed 2.3% to 19,780 yuan a tonne.

* For the top stories in metals and other news, click or ($1 = 6.6423 yuan) (Reporting by Mai Nguyen; Editing by Sriraj Kalluvila and Subhranshu Sahu)