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Sulfonic acid, which can cause serious harm to human health, has leaked into the Rio Seco in Joinville, southern Brazil.
The substance - used to produce detergents and household cleaning materials - was released when a truck crashed, triggering a local state of emergency.
A treatment station was closed on Monday morning to prevent the intake of contaminated water - potentially affecting dozens of neighbourhoods' access to drinking water.
Video on social media showed people stockpiling bottled water.