The intro pic shows the pencil on a key chain.
Step 1: How It Works
Step 2: Materials and Mixing
Gorilla Glue or Elmers white glue
Carbon Graphite available as lubricating graphite from a hardware store.
100% silicone caulk
Plastic mixing cup and mixing stick
Mix 3 measures of Carbon Graphite by volume with enough water to form a thick paste. Add 2 measures of white glue and mix well. Spoon the mix onto some polyethylene plastic on a flat surface. Spread it out 3/16" to 1/4" thick at a diameter large enough for the pencil.
Unfortunately I have not found a way to get it to set up faster, so it usually takes 3 or 4 days to totally harden up. While drying, it will shrink and warp a bit.
Because it has so much carbon which strengthens the plastic, it also works quite well as a pencil lead. It is hard enough to not rub off on your hands but soft enough to make smear less lines on paper that are light but very readable.
Step 3: Carving
It is easily drilled, cut, and carved using a Dremel tool. I used a sanding drum to smooth the sides and get the final shape.
While you can just drill a hole and hang it on the key chain, the pressure in a pocket could possibly crack the plastic. So, I made a flexible Oogoo loop to hold it on the keychain. I mixed 1 corn starch to 1 silicone caulk by volume and a dab of oil paint to give it color. I then rolled it thin between two layers of clear polyethylene plastic. I made it about 1/16" thick.
After an hour, I pealed off the plastic and cut the silicone to the desired size. See thumbnail pic.
I then mixed up a small batch of Oogoo just enough to fill the hole in the pencil to slightly overflowing. I used this to glue the loop on both sides of the hole by clamping it in place. The cured Oogoo glues incredibly strong to fresh Oogoo. For more details on using Oogoo see here: https://www.instructables.com/id/How-To-Make-Your-Own-Sugru-Substitute/
Step 4: Other Possibilities
While not super strong, the gluphite has unusual qualities.
It is very smooth and slippery because of the lubrication graphite and could be used for small light duty mechanical bearings or sliding surfaces.
It could be used for making small cast parts.
It is conductive and the mix works well as a conductive glue.
The white glue can also be mixed with corn starch or fine sawdust instead of graphite to create a hard carvable plastic that can be colored with oil or acrylic paints.