LONDON: Copper prices retreated on Monday as doubts about demand prospects in top consumer China were reinforced by news from the country’s troubled property sector and as the dollar firmed ahead of a meeting of the Federal Reserve.

Benchmark copper (CMCU3) on the London Metal Exchange (LME) traded 0.2% down at $8,524.5 a metric ton in official rings. Prices of the metal used in the power and construction industries hit a three-week high of $8,599 last week after China’s central bank injected large amounts of cash into the banking system.

Optimism faded as the dollar rose and data on Friday from China showed a second annual decline in profits in 2023. Traders said news on Monday that a Hong Kong court had ordered the liquidation of property giant China Evergrande Group has hit sentiment in metals markets.

“Uncertainty is a problem. China has major property issues to deal with and the Fed keeps pulling in different directions in terms of where interest rates are headed,” said SP Angel analyst John Meyer. The US central bank is expected to leave interest rates on hold this week.

A stronger US currency, meanwhile, makes dollar-denominated metals more expensive for holders of other currencies, which could undermine demand.

Also weighing on sentiment are copper stocks in warehouses monitored by the Shanghai Futures Exchange, which have risen more than 50% since early January to 50,532 tons. Reflecting weaker Chinese demand for imported demand is the Yangshan premium, which has dropped 50% since early December.

Elsewhere, aluminium prices fell as the market focused on demand rather than the possibility of EU sanctions, which last week helped push prices of the metal used in transport, construction and packaging to three-week highs of $2,283.

Aluminium traded down 1.1% at $2,249 a ton. In other metals, zinc slipped 0.4% to $2,566.50 a ton, lead firmed to $2,165, tin ceded 0.5% to $26,525 and nickel was down 1.4% at $16,545.