A pencil is a global product, and each of its parts has a supply chain. The wood has long come from cedar. Incense-cedar began as a substitute for Eastern red cedar, which was the premier pencil wood from the mid-1800s into the early twentieth century. In 1910 the Hudson Lumber Company, owned by the Eagle Pencil Company, opened a slat mill in San Leandro, California, to use the cheaper supply of California incense-cedar. A cedar slat mill says incense-cedar machines to a very smooth surface and sharpens well. The mill says it is also stable, standing up to changes in heat and moisture without warping, checking or shrinking. With few resin canals or pitch pockets it takes paint and stain smoothly. The tree grows in the inland forests of central and northern California and southern Oregon, makes up only about five percent of the trees in a typical stand, and has never been grown in single-species plantations.

The wood trade has changed. A California company that sells incense-cedar slats says it was the last slat maker in California before it moved slat making to Tianjin, China, in 2001. It says incense-cedar use for pencils has declined because of cost compared with other species, rules in western forests, less American house building and changes in log size. This is the seller's account, and it argues for its own product. The same seller offers a warning: the cedar label can be misleading. Some pencils sold as cedar, the slat supplier says, are made from other woods that perform worse and are harvested less sustainably; because the claim comes from a company with something to sell, it is best read as one side of an argument rather than a neutral test. A careful reader asks who benefits when a label is believed.

One response to the wood question is to remove the slat altogether. Staedtler's Wopex pencil, introduced in 2009, replaces the wood slat with an extruded body that is about 70 percent wood and the rest plastics and additives. Co-extrusion, the maker says, costs less energy and makes less waste than conventional pencil making, and the wood is used in its entirety. Those are the maker's claims about its own process. A different view comes from one reviewer. He found the extruded Wopex pencil firm and light, writing more like a 2H to 4H pencil than the HB it was labeled, and he reported that the core felt waxy and plastic-like. That is one reviewer's opinion, but it shows that two pencils with the same grade label can write differently, because a grade is a maker's recipe and not a physical standard.

The scale of the industry is hard to picture. By one estimate, over 14 billion pencils are made around the world every year, as of November 2026. Graphite has a bigger market than pencils. In 2025 no natural graphite was mined in the United States, the U.S. Geological Survey reports. American companies used about 71,000 tons, worth an estimated $128 million, and the main uses were batteries, brake linings, lubricants, powdered metals, refractories and steelmaking. Pencils were not on that list. These figures put the humble pencil in perspective: it is a small customer of a material that powers much larger industries. In the United States, those industries were far bigger than the pencil trade. Batteries and brakes are two of them.

China was the world's leading natural graphite supplier in 2025, with an estimated 82 percent of world production, according to the U.S. Geological Survey, and most of it was crystalline flake. American import sources for 2021 to 2024 were China 46 percent, Canada 13, Mozambique 13 and Mexico 12. Batteries now drive much of the trade: imports of graphite battery anode material were 43,400 tons in the first eight months of 2025, up from 28,100 tons a year earlier. Not all graphite sells for the same price. In 2025, the same agency's estimates put imported lump and chip graphite from Sri Lanka at about $2,600 per metric ton, imported flake at about $1,000 and amorphous at about $470, as average values at foreign ports. Synthetic graphite offers another route; it is made by heating petroleum coke or coal-tar pitch to 2,500 to 3,000 degrees Celsius, which drives off other elements so the carbon that remains links into sheets, and it can be over 99 percent carbon.

Words to know

• extruded: pushed through
• supplier: seller
• synthetic: man-made
• anode: battery part