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* Dalian iron ore, Shanghai rebar hit multi-year highs this week
* Spot iron ore could still top $100/tonne - CMC Markets (Updates prices, adds Vale's outlook)
By Manolo Serapio Jr
MANILA, Feb 24 (Reuters) - China's iron ore futures dropped more than 2 percent on Friday after a rapid rally underpinned by expectations that strong infrastructure spending would spur steel demand in the world's top consumer.
The fall pulled iron ore futures further away from a record high reached earlier in the week, and should similarly drag down spot prices, which have climbed to multi-year highs near $100 a tonne.
The most-traded iron ore on the Dalian Commodity Exchange closed down 2.4 percent at 698.50 yuan ($102) a tonne, but well off the session's low of 674 yuan.
The contract, which hit a record high of 741.50 yuan on Tuesday, lost 1 percent for the week.
"The size of today's move does reflect the speed with which iron ore has risen. But I suspect we will find a base over the next session or two before moving higher again," said Michael McCarthy, chief market strategist at CMC Markets.
For some investors, it's "a shorting opportunity looking for a more normal iron ore price," he said.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB fell 3.1 percent to $91.34 a tonne on Thursday, according to Metal Bulletin. The spot benchmark, which hit a 30-month peak of $94.86 on Tuesday, was still up 1.1 percent so far this week.
"The underlying supply-demand (condition) is supportive of higher prices in my view. I wouldn't be surprised to see an iron ore price above $100 a tonne," said McCarthy.
Top iron ore miner Vale said it expects the raw material to average above $80 this year on increased steel demand.
Iron ore prices have tracked the rally in China's steel market that had been supported by hopes of a pickup in construction activity from next month as well as Beijing's efforts to boost infrastructure investment to spur the economy.
"While we continue to believe that steel and iron ore prices are factoring in overly optimistic demand projections, China is likely to keep infrastructure investment, particularly transport, supported to shore up growth before elections in November," Commonwealth Bank of Australia analyst Vivek Dhar said in a note.
The most-active rebar on the Shanghai Futures Exchange dropped 0.4 percent to end at 3,498 yuan a tonne, after falling as far as 3,373 yuan earlier. It hit a three-year high of 3,630 yuan on Tuesday.
$1 = 6.8719 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Amrutha Gayathri and Subhranshu Sahu