* Short-covering lifts copper, stimulus may add incremental demand
* Copper prices still to fall to year-end on rising supply -UBS
* Coming up: Fed Chair Yellen speaks at ECB event at 1330 GMT (Adds detail; updates prices)
By Melanie Burton
MELBOURNE, June 29 (Reuters) - London copper rose to its highest almost eight weeks on Wednesday as investors bet on more global stimulus measures after Britain’s shock vote to leave the European Union.
European leaders told Britain on Tuesday to act quickly to resolve the political and economic confusion unleashed by its vote last week, after the IMF said the uncertainty could put pressure on global economic growth.
“Major central banks are ready for more easing measures to stabilize markets,” Argonaut Securities said in a note.
“Against this backdrop, declining inventories in steel, coal and copper in the Chinese domestic market and ongoing capacity reduction campaigns ... may support further increase in most commodity prices despite weak seasonal demand.”
Three-month copper on the London Metal Exchange had slipped by 0.3 percent to $4,805 a tonne by 0745 GMT, having earlier risen to the highest since May 5 at $4,831.50, following a 2.3 percent gain in the previous session.
Shanghai Futures Exchange copper pared early gains, closing up 0.9 percent at 37,150 yuan ($5,586) a tonne.
Short-covering has helped to buoy metals prices, including copper, said analyst Daniel Morgan at UBS in Sydney.
“Beyond the short-term gyrations, the bias for copper is for it to still ease from here through the rest of the year. Demand is positive but it’s not spectacular and many signals point to a copper market that is well supplied,” he said.
While ShFE copper stocks have dropped by 60 percent since March, LME stocks surged by nearly 40 percent in early June, as traders relocated metal to cheaper storage and as price differentials favoured exports to global markets. CU-STX-SGH
ShFE zinc and nickel prices jumped 3 percent and 2.3 percent respectively on Wednesday, tracking gains in London and on hopes countries would bring in new measures to soothe uncertainty after Britain’s referendum.
Gains also came as U.S. Federal Reserve Governor Jerome Powell said the Brexit result had shifted global risks “to the downside”, reinforcing expectations of no near-term U.S. rate rise, while financial markets were also supported by hopes of further stimulus globally.
Japanese Prime Minister Shinzo Abe on Wednesday pledged to use all available policy tools to keep the wheels of the economy turning while Chinese authorities also moved to calm investors
Chinese Premier Li Keqiang said on Tuesday he wouldn’t allow the post-Brexit panic that roiled global currencies and stocks to send the country’s financial markets into a tailspin, an indication authorities would intervene if needed to prevent market chaos.
In news, after signs China was curbing aluminium output late last year, the world’s biggest producer is gradually increasing output again, raising the risk of fresh tensions with global trading partners from any spike in exports.
Three month LME copper
Most active ShFE copper
Three month LME aluminium
Most active ShFE aluminium
Three month LME zinc
Most active ShFE zinc
Three month LME lead
Most active ShFE lead
Three month LME nickel
Most active ShFE nickel
Three month LME tin
Most active ShFE tin
$1 = 6.6503 Chinese yuan renminbi Reporting by Melanie Burton; Editing by Joseph Radford and Christian Schmollinger