Oxidation of nanometer metallic particles has been an obstacle that hinders the application of these materials in magnetic fluids. In this paper, the synthesis of magnetic fluids containing carbon-coated iron nanoparticles have been investigated. The carbon-coated iron nanoparticles have been produced by a W-arc discharge method. The uncapsulated particles and carbonaceous debris have been removed from the product by acid treatment and magnetic separation. The morphology, size distribution and phase composition of the particles have been characterized by TEM and XRD. The results show that the size of the particles is about 10 nm, the core of the particles is iron, and the shell of the particles is onion shaped carbon layers. The mineral oil based magnetic fluids containing carbon-coated iron nanoparticles was synthesized by using complex surfactants (T151 and OAE) to form double surfactant layers on the particle surface. The magnetic fluids with highest magnetization was obtained when the amount of surfactants is 160% of that of carbon-coated particles in weight. The magnetic properties of the encapsulated particles and magnetic fluids were investigated by VSM, their magnetization curves show a lack of hysteresis, characteristic of superparamagnetic material. The saturation magnetization of carbon-coated iron particles is 113.9emu/g, and the saturation magnetization of magnetic fluids containing carbon-coated iron particles (35%wt.) is 32emu/g.

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