* Dalian iron ore set to drop more than 8 pct this week
* Shanghai rebar down nearly 3 pct on day, 5 pct on week
* Oil, gold also down in broad commodities fall (Updates prices)
By Josephine Mason
BEIJING, May 5 (Reuters) - Chinese iron ore futures plunged to their lowest since January on Friday, extending this week's losses and also dragging down steel, with investors liquidating long positions in response to worries about slowing construction and infrastructure demand.
This week's sell-off has pushed one of China's largest commodity derivatives markets down 8.2 percent, marking its worst weekly performance since December.
"Reining in of excessive local government debt and the shadow banking sector in China has been high on the central government agenda, leading to concerns that tighter liquidity will affect completion of some large infrastructure projects," said commodities broker Sucden in a research note.
Iron ore on the Dalian Commodity Exchange DCIOcv1 closed down 7.5 percent at 461.5 yuan ($66.89) per tonne, its biggest daily drop since late November. Earlier in the session, it hit 485 yuan, its weakest since Jan. 9.
The most-active rebar contract on the Shanghai Futures Exchange SRBcv1 ended down 2.5 percent at 2,931 yuan a tonne, posting a 4.4 percent drop for the week.
Friday's selling spree was spread across the broader global commodities markets. Oil prices were marooned near five-months lows after a near 5 percent fall in the previous session on concerns over rising U.S. supply, wiping out all of the price gains since OPEC's move to curb output. Gold was also on track for its worst week since November. O/R GOL/
China's import data due for release on Monday will be keenly watched for signs of the world's second-largest economy's appetite for raw materials.
March arrivals of iron ore were the second highest on record, as steel output hit a record, but analysts and traders have warned of slowing demand for end-products. TRADE/CN earlier this week showed iron ore shipments to China from Australia's Port Hedland terminal, used by big mining groups BHP Billiton (LON:BLT) BHP.AX and Fortescue Metals Group FMG.AX , rose to 34.86 million tonnes in April from 31.5 million tonnes in the previous month. ore for delivery to China's Qingdao port .IO62-CNO=MB slid 5.1 percent to $65.20 a tonne on Thursday, its lowest since April 19, according to Metal Bulletin. It marked the steepest one-day decline for the spot benchmark since April 12.
Coking coal futures DJMcv1 on the Dalian exchange fell 4.85 percent to 1,020 yuan a tonne. Coke DCJcv1 dropped 3.1 percent to 1,477.5 yuan. ($1 = 6.8992 Chinese yuan renminbi)