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I purchased commercial Ferrofluid, and when suspended, the water and/or alcohol turns into a brown sludge. In 95% alcohol, all the metal particles separated from the "tar" Why, and how can I prevent this?

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Assuming the ferrofluid is the one described at product description, then it is "an extremely fine powder, coated with a soap-like material called a surfactant, suspended in a mineral oil liquid base." From that description, it might be possible to dilute or extend the ferrofluid with mineral (or even vegetable) oil, but one would not expect ferrofluid to be compatible with water or with alcohol. It might be possible to dilute it with other aliphatic solvents.

There are directions for making your own water-based ferrofluid at Synthesis of an Aqueous Ferrofluid.

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