LONDON, Jan 29 (Reuters) -

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

Benchmark copper (CMCU3) on the London Metal Exchange (LME) was down 0.3% at $8,517 a metric ton at 1118 GMT.

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 yearly 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 U.S. central bank is expected to leave interest rates on hold this week. A higher U.S. currency 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 at 50,532 tons are up more than 50% since early January.

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 instead of 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 was last down 0.8% at $2,256 a ton.

In other metals, zinc slipped 0.3% to $2,568, lead gained 0.2% to $2,169, tin was little changed at $26,660 and nickel fell 1.5% to $16,535.

(Reporting by Pratima Desai; Editing by Ravi Prakash Kumar)