Commodity rebound fades as global glut persists

London

SO much for the commodity recovery.

After a 2016 rally that ended five straight years of declines, prices of everything from crude oil and zinc to sugar and soya beans are once again mired in slumps. The outlook for industrial materials like iron ore and coal may get even worse, with slowing economic growth in China - the world's top consumer - compounding global surpluses. The Bloomberg Commodity Index has dropped for three straight months, the longest decline in more than a year.

While demand for many raw materials remains strong, the growth and the tight supplies that supported last year's rally are fading, according to Macquarie Group Ltd. Oil inventories are so large that Opec and its partners agreed in May to extend this year's production cuts for another nine months. Global stockpiles of grain before the 2017 harvest are the biggest ever, and a London Metal Exchange price index is in its steepest decline si…