(Adds analyst comment, updates prices, changes dateline from SINGAPORE)
LONDON, Oct 8 (Reuters) - Copper prices slipped on Tuesday as investors feared that U.S.-Chinese trade talks would make little progress, but the metal was vulnerable to a squeeze higher due to heavy bearish positions, an analyst said.
Washington blacklisted Chinese companies over Beijing's treatment of predominantly Muslim ethnic minorities while President Donald Trump said a quick trade deal was unlikely.
"The consensus remains skeptical about a resolution, but a mini-deal, just on tariffs, might be a concrete expectation," said Gianclaudio Torlizzi, Partner at consultancy T-Commodity in Milan.
"The risk-reward now points to the upside for copper and aluminum in particular because the short positioning is elevated," he said.
"This makes them vulnerable to a squeeze higher in case a truce between the U.S. and China is reached."
Chinese Vice Premier Liu He, U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin, will begin trade talks in Washington on Thursday, the first minister-level negotiations in several months.
Three-month copper on the London Metal Exchange (LME) was down 0.4% at $5,695.50 a tonne by 1030 GMT, trimming gains of 1.4% in the previous session.
* ANTOFAGASTA: Chile's Antofagasta has requested government mediation to resolve a contractual dispute with supervisors at its flagship Los Pelambres copper mine, the supervisors' union said.
* COPPER SPREAD: The discount of LME cash copper to the three-month contract <CMCU0-3> increased to $36.90 a tonne by Monday's close, the highest since August 2018, indicating plentiful supplies in the LME system. It was last at $36.65 on Tuesday morning.
* NICKEL STOCKS: LME nickel inventories <MNISTX-TOTAL> continued to fall on Tuesday to 117,522 tonnes, the lowest since August 2012.
Three-month LME nickel fell as much as 3.3% to a one-week low of $17,135 a tonne, but later pared the losses to $17,510, a decline of 1.2%. It slipped for a second day after jumping 3.4% last week amid a drawdown in stocks.
* PRICES: LME aluminum fell 0.2% to $1,742 a tonne, zinc shed 0.7% to $2,273, lead lost 0.3% to $2,182, while tin added 0.2% to $16,355.
* For the top stories in metals and other news, click or (Additional reporting by Mai Nguyen in Singapore and Tom Daly in Beijing, editing by Louise Heavens)