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Arkema shares slump after explosions at flood-hit plant in Texas – CNBC

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Arkema shares fell sharply on Thursday after two explosions were reported at its flood-hit chemical plant in Crosby, Texas.

Chemicals were released into the atmosphere after Arkema’s U.S.-based complex sustained significant damage from Tropical Storm Harvey. One police officer helping to secure the site was reportedly taken to a nearby hospital after inhaling fumes, while nine others admitted themselves as a precaution.

Residents living within a 1.5 mile (2.4 kilometer) radius of the French chemical group’s site had been evacuated as the company warned there was a risk of explosions and fire.

Arkema said further explosions of organic peroxides stored on site were possible and urged people to stay away as the fire burns itself out.

‘Financial impact should be limited’

“Whilst this is obviously bad and unfortunate news, it is also so far the only case of long term impact from Harvey on the asset base of the industry in the region,” Laurent Favre, head of global chemicals research at Evercore ISI, said in a note.

“We stress that the financial impact should be limited as insurance would cover the loss of business, but also the capital expenditure to rebuild the site,” he added.

Shares of Arkema were more than 2.5 percent lower in Paris during early afternoon deals on Thursday. The stock was off by around 1.5 percent immediately after reports of the Crosby blast emerged, before slipping to a three-month low shortly after midday.

Fire to burn itself out

Arkema said the company had no way to prevent fires because the plant is swamped by about 6 feet (1.83 meters) of water due to flooding from Harvey, which came ashore in Texas last week as a powerful Category 4 hurricane, knocking out power to its cooling system.

The company said it was notified at about 2 a.m. Thursday by the Harris County Emergency Operations Center of two explosions and black smoke coming from the plant in Crosby.

“Organic peroxides are extremely flammable and, as agreed with public officials, the best course of action is to let the fire burn itself out,” the company said.

— Reuters contributed to this report.

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Arkema shares slump after explosions at flood-hit plant in Texas – CNBC

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