LONDON - Copper prices lost ground on Tuesday as many investors shunned the market due to uncertainty about U.S.-China trade talks and how the ongoing trade war between the world's two largest economies will hit economic growth and metals demand.

Benchmark three-month copper on the London Metal Exchange was down 0.3% at $9,767 per metric ton by 1000 GMT, having recovered by 20% since hitting its lowest since November 2023 in April.

"We have a lot of market complacency right now. Volatility seems to be drifting lower across markets even though we have yet to see any breakthrough on trade talks with China," said Ole Hansen, head of commodity strategy at Saxo Bank in Copenhagen.

Top U.S. and Chinese officials will resume trade talks for a second day in London on Tuesday, hoping to secure a breakthrough over export controls for rare earths and other goods.

More copper inventories departed from LME-registered warehouses as traders took advantage of higher U.S. prices due to expectations that U.S. President Donald Trump will impose tariffs on the metal, following duties levied on aluminium and steel.

LME copper stocks eroded by another 2,000 tons to 120,400, data showed on Tuesday, having tumbled by half over the past three months.

U.S. Comex copper futures dropped 0.8% to $4.89 a lb, bringing the premium of Comex over the LME to $1,000 a ton.

"The appetite is failing somewhat, especially in the New York market, because the tariff announcement will be a binary event and some fireworks can probably not be avoided once you get that news out."

Traders are awaiting the outcome of an investigation Trump ordered in February on potential import tariffs on copper.

In China, zinc on the Shanghai Futures Exchange softened for a third trading day, losing 1.3% to 21,845 yuan a ton, the lowest since late April.

"China's domestic demand has shown signs of weakening recently, and buyers have been procuring to meet their immediate needs at lower prices," Shanghai-based commodity market research house SHMET said.

Among other LME metals, aluminium dipped 0.1% to $2,477 a metric ton, nickel ceded 0.7% to $15,310, zinc ceded 0.1% to $2,648, lead fell 0.4% to $1,978.50, while tin was up 0.1% at $32,750. ($1 = 7.1871 Chinese yuan)