About 29,096 people have been evacuated as two storage tanks of the factory producing paraxylene (PX), an industrial chemical used to make fiber and plastics, were ignited again for the third time, official media reported.
On Monday evening, oil leaked from a xylene facility caught fire and led to blasts at three nearby chemical oil tanks at Tenglong Aromatic Hydrocarbon (Zhangzhou) Company Limited on the city's Gulei Peninsula.
It was the second accident in 20 months at the same plant.
Several firemen were spraying water over storage tanks to cool them down, state-run Xinhua news agency reported.
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"We're worried the fire is not properly out," said a resident of Youwo Village of Gulei Town.
Another villager surnamed Lin told Xinhua that he and his parents would stay with relatives in another city for a while.
Provincial environmental and marine affairs departments said no excessive pollutants have been detected in surrounding areas. Pollution monitoring is continuing.
The Tenglong plant covers about 115 hectares, including factories, a specialised wharf for oils and a thermal power station, according to its official website.
Some 10,500 people had moved to new homes by the end of last year, Shen Yongxiang, director of the management committee of Gulei economic development zone said.
More than 400 people were still living in the area when the fire broke-out, said Shen.
Known primarily for flower and fruit production, Zhangzhou has accelerated industrial development, especially of chemical works in recent years after seeing its neighboring cities of Xiamen and Quanzhou benefit from such a drive.
Gulei Peninsula, once famed for carrot production, is now among the seven biggest petrochemical industry bases in China.