* LME/ShFE arb: http://tmsnrt.rs/2oQ5nm20 (Updates throughout, moves dateline from Melbourne)
LONDON, Aug 23 (Reuters) - Nickel prices rose to an eight-month high on Wednesday while zinc touched its highest since August 2007 on expectations of strong demand from top consumer China, supply concerns and declining stockpiles.
"Nickel and zinc have benefited from the Chinese stimulus push, which we see continuing throughout the year," said Sucden analyst Kash Kamal.
However, nickel stockpiles are large enough to compensate for a small global deficit and prices could fall sharply, he added.
Price gains were slowing after a surge of speculative investment drove rallies across most industrial metals. "The buying is tiring," said one London trader.
LME NICKEL: Three-month nickel on the London Metal Exchange was up 1.1 percent at $11,540 a tonne at 1008 GMT. It earlier touched $11,570, the highest level since Dec. 12.
STOCKS: Prices were supported by a fall in on-warrant stockpiles at LME-registered warehouses to the lowest since January after 5,682 tonnes of cancellations. <MNISTX-TOTAL>
DEFICIT: A global deficit of refined nickel narrowed in June from May, but consumption exceeded output by 36,800 tonnes in the first half of the year.
SUPPLY: Prices have been underpinned by concerns over supplies from top ore exporter the Philippines, where output fell 24 percent in the first half amid an environmental crackdown. However, high prices could prompt the country to raise exports, Sucden's Kamal said.
CHINA DEMAND: Growth in the world's largest metals market beat expectations in the second quarter, underpinned by a construction boom.
EUROZONE: Euro zone manufacturing businesses registered their best month of growth in six-and-a-half years in August, driven by performance in Germany.
LME ZINC: Benchmark zinc was up 0.8 percent at $3,142.50 a tonne after rising to $3,231.75, its highest since August 2007. Zinc has risen on expectations of a large global deficit and a sharp fall in stocks. <MNISTX-TOTAL>
CHINA SUPPLY: China's crackdown on pollution could hurt the country's smaller zinc miners and support prices, said Jerry Jiao, CEO of MMG, owned by China Minmetals Corp.
LME COPPER: Three-month copper was up 0.1 percent at $6,589 a tonne, having retreated from the previous session's peak of $6,649, its highest since November 2014.
STOCKS: On-warrant stocks at LME-registered warehouses fell to 113,600 tonnes, the lowest since March, after 8,525 tonnes of cancellations. <MCUSTX-TOTAL>
ESCONDIDA: The Escondida copper mine in Chile, the world's largest, has recovered from a six-week strike faster than expected, with output now running at normal levels.
PRICES: Aluminium rose 0.1 percent to $2,076 a tonne, lead was flat at $2,415 and tin was up 0.4 percent at $20,435.
(Additional reporting by Melanie Burton; Editing by David Goodman)