* GRAPHIC-2017 asset returns: http://tmsnrt.rs/2jvdmXl
* LME/ShFE arb: http://bit.ly/2wZSAEz (Adds analyst comments, updates prices, changes dateline from SYDNEY)
LONDON, Jan 12 (Reuters) - Zinc prices edged up to their highest in more than a decade on Friday, supported by potential shortages and low inventories, but some investors were concerned about the lofty levels.
Benchmark zinc on the London Metal Exchange rose to $3,409 a tonne, the strongest since August 2007, and was up 0.3 percent at $3,395 by 1120 GMT.
Zinc prices have rallied 11 percent since early December and were the top gainer among LME metals last year, surging 32 percent.
"Global exchange inventories have declined to about six to seven days of global consumption, so stocks are tight, and China's environmental checks will continue, so that will limit supply growth domestically," said Xiao Fu, head of commodity market strategy at Bank of China International in London.
"Fundamentally it's tight, but people are getting worried at these high price levels. Funds are probably a bit reluctant to chase the rally from here. We think there's moderate upside, we're cautiously bullish."
LME inventories <MZNSTX-TOTAL> have tumbled 58 percent over the past 12 months to 180,150 tonnes after closures and suspensions of big mines in recent years.
* COPPER - LME three month copper dipped 0.2 percent to $7,128 a tonne, pressured slightly by Chinese data.
* CHINA TRADE DATA - China's unwrought copper imports fell 4.3 percent in December from a month earlier, but imports still stood at the second-highest level in 2017.
* CHINA COPPER PREMIUM - The Yangshan copper premium was down to $74 a tonne from a peak of $80 in late December, Alastair Munro at broker Marex Spectron said in a note.
* COPPER DROP FORECAST: Capital Economics said it expects copper to retreat as the year progresses, averaging just $6,800 a tonne in the first quarter and $6,250 in the second quarter.
* ALUMINIUM - LME aluminium was the best performer on the exchange, rising 2.2 percent to $2,222.50 a tonne, shrugging off news of higher Chinese exports.
* CHINA ALUMINIUM EXPORTS: China's exports of unwrought aluminium and aluminium products rose for a second straight month in December, by 15.8 percent from November.
* DOLLAR - Base metals got support from a weaker dollar , making commodities priced in the greenback cheaper for buyers using other currencies.
* NICKEL: LME nickel recovered from an overnight sell-off to trade 0.7 percent firmer at $12,710 a tonne.
(Additional reporting by James Regan in Sydney; Editing by Mark Poter)