BEIJING, Jan 11 (Reuters) - Chinese steel product futures dropped on Monday, with stainless steel falling more than 4% in early trade, as inventories piled up for a second consecutive week on easing seasonal demand while a surge in domestic COVID-19 infections also weighed.

As of Jan. 7, stockpiles of the industrial metals rose for a second week, up by 5% from the week earlier, data from Mysteel consultancy showed. Inventories for construction steel rebar jumped 5%.

Meanwhile, mainland China has reported 103 new coronavirus cases for Jan. 10, the biggest daily increase in over five months. Top steelmaking province Hebei had 82 new cases, accounting for 96% of total confirmed local infections, stoking concerns on steel mills' production and logistics.

Steel rebar on the Shanghai Futures Exchange, for May delivery, fell 1% to 4,427 yuan ($682.17) a tonne, as of 0215 GMT.

Hot-rolled coil dropped 1.6% to 4,580 yuan a tonne.

Stainless steel on the Shanghai bourse, for March delivery, plunged 3.3% to 14,185 yuan a tonne, after opening down more than 4% during the session.

Prices for steelmaking ingredient also declined.

The most-traded iron ore futures on the Dalian Commodity Exchange slipped 1% to 1,053 yuan a tonne and coke dropped 3% to 2,870 yuan.

Capacity utilisation rates at 163 blast furnaces across China fell to 83.3% last week, the lowest level since April 10, 2019, according to Mysteel.

Coking coal gained 1.5% to 1,791 yuan a tonne.

FUNDAMENTALS

* Spot prices for iron ore with 62% iron content for delivery to China , compiled by SteelHome consultancy, rose by $1 to $172.5 per tonne on Friday.

* China's factory gate prices fell last month at their slowest pace since February, official data showed on Monday, suggesting China's manufacturing sector continues to see a steady recovery from the COVID-19 shock.

($1 = 6.4896 Chinese yuan) (Reporting by Min Zhang and Shivani Singh; Editing by Sherry Jacob-Phillips)