Using water as a cutting fluid has two problems.

1. Water will rust the machine and possibly the work piece.
2. Plain water does not spread evenly. Chemical waters spread out over the part more uniformly and can therefore remove heat much more efficiently.

Therefore there are special cutting fluids available to solve the problem. The basic four types of cutting fluids for milling operations are all provided in a container similar to those shown here.

1. Chemical fluids (mostly water) - alkaline inorganic and organic compounds, 3 to 10 % concentration Best cooling performance
2. Emulsions (mostly water) - also called soluble oil, emulsifiers keep it mixable, 3 to 10% concentration Good lubrication & heat transfer but not as good as chemical fluids. More inexpensive than chemical fluids.
   
3. Semi-Chemical fluids, a mix between Chemical fluid and emulsion 5 to 40% mineral oil. Can be used when advantages of both products are desired. More expensive than both other products.
4. Straight Cutting Oils 100% mineral oil with additives - non-emulsifiable, non-diluted, mainly petroleum oil with additives. A good fluid for cutting steel or when tapping diameters over ½”.

Please note that there are machining conditions where cutting fluid is avoided.

For example, when machining Polypropylene plastic, using a synthetic cutting fluid the plastic will absorb the cutting fluid making it grow in size temporarily.

Another example, when machining cast iron with carbide end mills, it is often recommended to use compressed air rather than cutting fluid to enhance tool life.