METALS-Base metals nudge higher on softer dollar, US rate outlook

(Updates prices)

SHANGHAI, Jan 17 (Reuters) - Prices of base metals edged higher on Friday, as support from a softer dollar and expectations of further U.S. rate cuts offset uncertainty over potential tariffs from U.S. President-elect Donald Trump.

Three-month copper on the London Metal Exchange (LME) was up 0.4% at $9,267 a metric ton, as of 0713 GMT, hitting a fresh five-week high.

"Copper also found some support after the State Grid Corp of China pledged record spending this year. The country's largest network operator is likely to spend around 650 billion yuan ($88.71 billion) to help connect new wind and solar farms to the nations grid," ANZ Research said in a note.

China's State Grid will invest a record more than 650 billion yuan ($88.7 billion) in the country's power grid this year, state-run CCTV said on Wednesday, up from 600 billion seen in 2024.

U.S. economic data on Thursday indicated consumer spending remains strong, while the labor market is also on solid footing, giving the Federal Reserve room to maintain a slow pace in cutting interest rates this year.

Concerns also lingered over potential tariffs from the Trump administration, scheduled to take office on Monday, that would further stoke inflation.

The dollar index paused its rally following the release of core consumer price index data. It was last at 109.17 - down from the 26-month high of 110.17 touched on Monday.

A weaker dollar makes greenback-priced commodities cheaper for holders of other currencies.

LME aluminium added 0.3% to $2,645, tin rose 0.4% to $29,700, nickel slid 0.5% to $15,885, lead rose 0.5% to $1,979 and zinc gained 1.1% to $2,905.

The most-active copper contract on the SHFE was up 0.8% to 76,540 yuan ($10,444.87)a ton by the close of Asia afternoon trade.

SHFE aluminium added 0.8% to 20,470 yuan a ton, nickel was up 0.5% at 128,170 yuan, zinc rose 1.9% to 24,215 yuan, lead gained 0.5% to 16,655 yuan and tin added 1.3% to 249,900 yuan.

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($1 = 7.3280 yuan) (Reporting by Violet Li and Mei Mei Chu; Editing by Sherry Jacob-Phillips and Subhranshu Sahu)