LONDON - Copper prices dropped to their weakest in nearly a month on Tuesday after weak Chinese trade and auto sales data heightened concern over demand from the world's biggest metals consumer.

Three-month copper on the London Metal Exchange (LME) extended losses into a third day, slipping 1.9% to $8,323 per metric ton in official open-outcry trading after touching the weakest price since July 10.

LME copper has recovered from May's slump below $8,000 a ton, the lowest in nearly six months, but remains well below its January peak of $9,550.50.

Investors unloaded industrial metals on Tuesday after data showed China's imports and exports fell much faster than expected in July, threatening growth prospects in the world's second-largest economy.

"With the trade data worse than expected, risk aversion has returned, so metals are surrendering the gains we had a bit earlier," said Amelia Xiao Fu, head of commodity market strategy at Bank of China International in London.

A week ago copper touched its strongest in more than a month on hopes for Chinese stimulus.

"Tomorrow we have Chinese CPI numbers, which could show some signs of deflation, so that could again weigh on sentiment," Fu added.

Data also showed that China's passenger vehicle sales fell for a second month in July while imports of unwrought copper and copper products dropped by 2.7% year on year.

Despite tight inventories in the domestic market, copper demand was limited during a seasonal summer trade lull.

A firmer dollar index also weighed on the market after a U.S. Federal Reserve official said that further increases to interest rates were likely.

A stronger dollar makes commodities priced in the U.S. currency more expensive for buyers using other currencies

Among other metals, LME aluminium shed 1.6% in official activity to $2,194 a metric ton, zinc slid 2.9% to $2,424, lead was down 0.9% at $2,118.50 while nickel lost 1.3% to $20,825 and tin gave up 0.7% to $27,550.

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($1 = 7.2133 Chinese yuan renminbi)

(Reporting by Eric Onstad; Editing by David Goodman)