The blast took place at Shuangma Chemical Plant in Rugao City, state-run Xinhua news agency reported.
Ten people have been rescued from the scene and sent to hospitals, while seven others remain missing, it said.
Firefighters have extinguished the flames, and the search for the missing is under way.
Established in 1997, Shuangma Chemical Plant mainly produces stearic acid, fatty acid and glycerol.
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