* Steel, iron ore futures rise after falling 3 days this week
* Big rebound sparked by jump in spot prices, technical recovery (Updates close prices, adds coal and coke prices)
SHANGHAI, July 21 (Reuters) - Chinese steel futures surged more than 5 percent on Thursday after three straight days of losses, lifted by a spike in spot prices and supported by a technical correction.
Spot prices of some steel products in a key producing region of Tangshan in northern China rose by 80 yuan ($11.98) a tonne, traders said, lifting the futures markets.
October prices for benchmark construction material rebar on the Shanghai Futures Exchange SRBcv1 surged 5.5 percent to a session high of 2,432 yuan a tonne before closing 3.9 percent higher at 2,396 yuan a tonne.
The October contract had lost more than 8 percent over the first three days of this week on profit-taking after hitting a 2-1/2-month high on July 13.
"Steel products inventories started to edge up, but they remain much lower from a year ago, and the government's campaign for overcapacity cuts is working," said a fund researcher in Beijing.
Steel product inventories owned by big mills rose 4.3 percent to 13.80 million tonnes by July 10, the latest data from the China Iron & Steel Association showed.
Steel output in the world's top producer is expected to slow in July but remain at a high level, after the average daily rate hit a record in June.
Some analysts warned the rebound, driven in part by a technical correction after the previous slump, will be curbed as China's slower property market will keep weighing on demand in the world's top consumer.
"It's a technical recovery after the previous slump, and I don't see big upward momentum in the short term as demand slows, hit by the rainy season, a weaker property market and fading stimulus hopes," said Tian Xinyuan, an analyst with Founder CIFCO Futures in Beijing.
A big spike in steel futures lifted steelmaking raw materials.
On the Dalian Commodity Exchange, iron ore DCIOcv1 rose by a daily limit to 448 yuan a tonne and closed up 5.7 percent at 447 yuan a tonne.
Coke futures DCJcv1 surged 5.3 percent and coal DJMcv1 gained 2.6 percent, respectively, by close.
Iron ore for immediate delivery to China's Tianjin port .IO62-CNI=SI steadied at $55.10 a tonne on Wednesday, according to The Steel Index, the same as Tuesday's close, which was the lowest since July 1. ($1 = 6.6760 Chinese yuan)