MANILA, Jan 27 (Reuters) - Benchmark base metals prices in London were mostly lower on Thursday after the U.S. Federal Reserve signalled a hike in interest rates as early as March, lifting the U.S. dollar, with copper retreating after two days of gains.

A U.S. interest rate hike could trim liquidity in financial markets and dampen prospects of economic recovery, while a firmer dollar makes greenback-priced metals more expensive to holders of other currencies.

Three-month copper on the London Metal Exchange was down 1.5% at $9,767 a tonne, as of 0457 GMT.

In a news conference on Wednesday following a Federal Open Market Committee meeting, Fed chief Jerome Powell said "the committee is of a mind to raise the federal funds rate at the March meeting assuming that the conditions are appropriate for doing so".

"Risk assets fell sharply in the wake of the FOMC meeting overnight with Fed Chair Powell sounding hawkish, even if he tried to be measured," said National Australia Bank economist Tapas Strickland.

But the most-traded March copper contract on the Shanghai Futures Exchange ended the morning trade 0.2% higher at 70,270 yuan ($11,072.77) a tonne, supported amid low inventories at exchanges.

FUNDAMENTALS

* The leader of an Andean community said on Wednesday that residents will block a controversial road used by MMG's Las Bambas mine to transport its metal starting on Thursday, a route that is a flashpoint of local protests.

* The U.S. Department of the Interior canceled two mineral leases for Antofagasta Plc's proposed Twin Metals copper and nickel mine in Minnesota on Wednesday, effectively killing the project and handing a major win to environmentalists.

* The United States has set out a diplomatic path to address sweeping Russian demands in eastern Europe, as Moscow held security talks with Western countries and intensified its military build-up near Ukraine with new drills.

* Shanghai aluminium rose 0.4% to 21,545 yuan a tonne, zinc slipped 0.4% to 24,700 yuan, nickel advanced 0.4% to 165,510 yuan, lead shed 0.4% to 15,395 yuan, while tin climbed 2.1% to 326,220 yuan.

* LME aluminium dropped 0.6% to $3,075.50 a tonne, zinc fell 0.8% to $3,580, nickel shed 1.5% to $22,345, while lead gained 0.1% to $2,325 and tin climbed 0.1% to $42,250.

($1 = 6.3462 yuan)

(Reporting by Enrico Dela Cruz in Manila; Editing by Sherry Jacob-Phillips)