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* Dalian iron ore traded near four-month lows
* Shanghai rebar drops 3 pct
* Demand concerns escalating as China reins in leverage -CBA (Updates prices)
By Manolo Serapio Jr
MANILA, May 12 (Reuters) - Chinese iron ore futures dropped to near four-month lows on Friday and posted their seventh weekly loss out of eight, weighed down by concerns over weak demand in the world's top consumer.
Slower than expected steel demand in China and a fresh crackdown on polluting mills have been aggravated by Beijing's efforts to guard against financial risks via tougher financial regulations.
In a bid to defuse asset bubbles and systemic risks, China has tightened its grip on the heated property market and other financial fronts ahead of a key party congress later this year.
The most-active September iron ore on the Dalian Commodity Exchange closed down 2.4 percent at 450.50 yuan ($65) a tonne. It hit 448 yuan earlier, not far off Thursday's trough of 445 yuan, which was its weakest since Jan. 4. It dropped 3 percent for the week.
"Demand concerns have escalated as China's banking, insurance and securities regulators rein in leverage," Commonwealth Bank of Australia said in a note.
"The spectre of less leverage will continue to be a negative driver for global commodity prices."
The weakness in futures had dragged down spot prices although the benchmark has managed to stay above $60 a tonne.
Iron ore for delivery to China's Qingdao port .IO62-CNO=MB slipped 0.6 percent to $60.38 a tonne on Thursday, not far above a six-month low, according to Metal Bulletin.
It has declined 2.2 percent this week, on track for its seventh weekly loss in eight.
The most-active rebar on the Shanghai Futures Exchange fell 2.9 percent to end at 2,941 yuan per tonne on Friday.
China is holding a summit on May 14-15 to map out its ambitious new Silk Road project, an event expected to gather leaders of 28 nations in Beijing.
Around $900 billion worth of direct overseas infrastructure projects are now either underway or in detailed planning stages, Citi analysts said in a report, citing the China Development Bank.
The $900 billion investment will generate around 120 million tonnes of crude steel demand, they said.
"As we expect the strong momentum of overseas infrastructure investments should continue in 2017, China's investment and commodities demand should be interpreted in a broad way," they said.
$1 = 6.9041 Chinese yuan Reporting by Manolo Serapio Jr.; Editing by Joseph Radford