(Changes dateline, adds President Yoon comments, experts comments)

HWASEONG, South Korea, June 24 (Reuters) - A powerful explosion set a lithium battery factory on fire in South Korea on Monday, killing at least 16 people, and a search and rescue operation is ongoing for five others who remain missing, local fire officials said.

The fire, which has largely been extinguished, ripped through a factory run by battery manufacturer Aricell in Hwaseong, a major industrial cluster about 90 minutes southwest of the capital Seoul.

The blaze began after a series of battery cells exploded inside a warehouse with some 35,000 units, said Kim Jin-young, a local fire official. What had triggered the explosion remains unclear, he added.

A Reuters witness saw firefighters moving up to six bodies out of the factory. Due to the intensity of the blaze, rescuers were finding it difficult to identify the dead, Kim added.

Yonhap news agency had earlier reported that some 20 bodies had been found inside the plant, but Kim told a televised briefing that 16 people had died and two others were suffering from burns and other serious injuries.

He said rescuers were inside the factory trying to find the five people unaccounted for.

Kim Jae-ho, Fire and Disaster Prevention professor at Daejeon University, said the fire had probably spread too quickly for workers to escape.

"Battery materials such as nickel are easily flammable," he said. "So often, there is not enough time to respond, compared to a fire caused by other materials."

President Yoon Suk Yeol was monitoring the situation, his office said, while Interior Minister Lee Sang-min called on the local authorities to take steps to prevent any hazardous chemicals from contaminating the surroundings.

Established in 2020, Aricell makes lithium primary batteries for sensors and radio communication devices. It has 48 employees, according to its latest regulatory filing and its Linkedin profile.

Calls to Aricell offices were unanswered.

The company is not listed on South Korea's stock market but is majority owned by S-Connect, according to Aricell regulatory filing. S-Connect is registered on the junior Kosdaq index and its shares closed down 22.5%.

Live TV footage showed firefighters spraying the damaged steel and concrete building. Parts of the upper level had collapsed, and large chunks of the building looked like they had been blown out into the street by an explosion.

South Korea, a major industrial economy, has made efforts to improve its safety record after several past accidents, many of which have been blamed on negligence.

(Reporting by Hyonhee Shin, Ju-min Park, Joyce Lee and Heekyong Yang, writing by Jack Kim; Editing by Kim Coghill and Miral Fahmy)