Copper soared to a record high on Thursday as a strike in Peru stoked supply fears and as investors sought alternatives to equities, while surging oil pushed aluminium to a four-month peak.

Copper for three-month delivery on the London Metal Exchange was at $8,810 a tonne at mid-session, down from an earlier record high of $8,940. It closed at $8,720 on Wednesday.

Aluminium was up at $3,208 a tonne from $3,200 on Wednesday. Earlier in the session it reached $3,229 a tonne - the highest level since March 7.

“The rise in prices is a confluence of recent factors: the weak dollar, the record oil price and the continued spate of production problems,” said Robin Bhar, an analyst at Calyon.

Workers at Freeport-Mcmoran’s Cerro Verde pit, Peru’s third-largest copper mine, joined a nationwide strike that entered its third day on Wednesday.

A global sell-off knocked world shares to a five-month low on Thursday as surging oil fanned concerns about inflation and slowing growth.

“Weakening stock markets are something we can’t ignore, particularly at the beginning of a new quarter and the second half of the year,” Bhar said.

“We are seeing fund inflows although they are being a lot more sophisticated about it by going for the markets that are really tight like copper and aluminium.”

The euro hit a two-month high against a broadly struggling dollar before the European Central Bank raised interest rates by a quarter percentage-point which took benchmark rates to 4.25 percent, the highest level since September 2001.

The US Labor Department said 62,000 jobs were lost from non-farm payrolls last month, bringing losses for the year so far to 438,000 as a collapse in the housing market chilled growth.

ELECTRIC ALUMINIUM

Rising energy prices were the main support for aluminium.

“The single most important factor in the aluminium price increase is that the cost of production has gone up rapidly,” said Eugen Weinberg, commodities analyst at Commerzbank.

Oil rose to a new record high of $145.85 after government data showed crude inventories fell much more than expected last week.

Aluminium, used in transport, packaging and power, is heavily reliant on electricity. Analysts estimate between one-third and 45 percent of smelting costs are for power.

LME lead fell nearly 5 percent to a near five-month low of $1,625 a tonne as investors worried about oversupply in the market and was at $1,650 a tonne versus $1,705 on Wednesday.

Lead stocks in LME warehouses rose by 25 tonnes to 100,500 and have more than doubled since January.

“Lead has been on its knees and I think it can go lower,” Bhar at Calyon said. “We’re in a slack period for demand. You don’t tend to get battery-buying and restocking until the end of the third quarter.”

Zinc fell to $1,829/1,830 a tonne from $1,865 on Wednesday. Earlier it touched $1,820 a tonne, the lowest since December 2005.

Tin eased to $23,000/23,025 a tonne from $23,200 and nickel

slipped to $21,100/21,200 a tonne versus $21,150.