Witnesses have described hearing an explosion moments before a fire erupted at a scrap metal yard in Portsmith with emergency services struggling to extinguish the flames and smoke burning since around midday.

A man is being treated in Cairns Hospital and people with asthmatic conditions are being urged to stay indoors as smoke from the fire blankets the city

Cairns resident Melanie Husband was at Bunnings when the explosion occurred.

"We were next door in Bunnings when the explosion occurred," she wrote on the TropicNow Facebook page.

"It was so loud and the whole building shook. There was a lot of panic about what had happened and what we should do!"

It is understood the explosion was caused by fuel being ignited while a vehicle was re-locating from a stockpile of scrap metal at the Sims Metal depot on Comport Street.

Queensland Fire and Emergency Services are in for a long battle to bring the flames under control as acrid smoke continue to bellow across Cairns.