* China's economy showed positive changes in Q3 - Premier Li
* Slow iron ore restocking so far - trader (Updates prices)
By Manolo Serapio Jr
MANILA, Oct 11 (Reuters) - Chinese iron ore futures jumped more than four percent to rebound from two-week lows on Tuesday, tracking a similar spike in steel prices as more investors returned from a week-long break, but some traders say slow physical demand may limit the upward momentum .
Chinese Premier Li Keqiang's comments about the world's No. 2 economy showing positive changes in the third quarter also helped boost sentiment.
There has also been a diversion of funds from property markets to commodity futures, said Helen Lau, analyst at Argonaut Securities. China has stepped up efforts to curb home purchases to temper rising prices.
The most-active rebar contract on the Shanghai Futures Exchange closed up 4.1 percent at 2,339 yuan ($351) a tonne. The construction steel product hit a three-week trough of 2,209 yuan on Monday when Chinese markets reopened after a week-long National Day holiday.
On the Dalian Commodity Exchange, the most-traded iron ore contract climbed 4.3 percent to end at the day's peak of 422 yuan, after touching a two-week low of 398 yuan in the prior session.
But a Shanghai-based iron ore trader said he hasn't seen much restocking of the raw material so far.
"People are just checking around for prices and we have not seen firm business on our side," he said.
He added that the Chinese authorities continue to order mills to either curb or halt output as Beijing tackles overcapacity in the sector, causing a potential drag on iron ore demand.
Chinese authorities this year have carried out frequent environmental inspections of steel mills that have forced producers to reduce or stop production for a certain period of time.
Beijing said on Monday that as many as 173 Chinese steel enterprises were found to have violated the country's environmental rules during recent nationwide investigations into the industry.
But firmer ferrous futures had helped fuel a recovery in spot iron ore prices after dropping last week for a sixth week in seven.
Iron ore for delivery to China's Tianjin port .IO62-CNI=SI jumped 2.6 percent to $55.80 a tonne on Monday, according to The Steel Index, after falling on Friday to the lowest since July 1. ($1 = 6.6685 Chinese yuan) (Reporting by Manolo Serapio Jr.; Editing by Richard Pullin and Vyas Mohan)