Pencils usually have some letters and numbers on them - HB, 2B, 4H, or even just numbers - 2, 2 ½, etc. This article is intended to explain what those odd little codes actually mean.
Pencil lead is made of a mixture of graphite and clay. The graphite is the part that makes the dark mark on the paper. The clay is there because graphite on its own is far too soft and crumbly to write or draw with. Thin leads for mechanical pencils are similar, but with a polymer or resin taking the place of the clay.
Wooden pencil leads also have a little wax or grease added for extra smoothness. In mechanical pencil leads, this is replaced with oil.
The grade, or hardness, of a pencil is due to the proportions of graphite and clay (or polymer/resin). More graphite makes for a softer lead, and more clay makes for harder lead.
What it Means in Use
When you're actually using a pencil, you want it to make marks on paper. The softer the lead, the darker the marks it will make. Artists often use a range of different pencils for a single drawing, switching to a harder lead when they want light shading, and a softer lead for darker areas.
The downside of softer lead is that you're getting the extra darkness by putting more of the lead on the paper, so it gets used up faster. That means you'll be sharpening more often, or with a mechanical pencil, clicking out lead more often. You'll also have to buy more lead or another pencil sooner - great for us, but maybe not so good for you ;)
Here in Europe and the UK, we have one system for both art pencils and office pencils. The middle ground is referred to as HB. Softer lead gets a B grading, with a number to say how soft the lead is. B on its own is just a little softer than HB. 2B, 3B and 4B are increasingly soft. Further up the range, 9B is the very softest lead available, but so soft and crumbly that it's rarely used. Anything over 4B is probably too soft for most people's day-to-day use.
Harder leads than HB get H ratings. In the same way as with the B ratings, the numbers go as far as 9H, but few people need anything that hard. There is an extra grade used by some manufacturers, between HB and H - an F grade, for 'Firm'.
For art and drawing pencils, Americans use the same system. For office use, they often use a different system, with just numbers. A #2 pencil is the same as an HB, with lower numbers for softer pencils and higher numbers for harder.
This numbered system only covers a range from B to 2H - enough to cover most office use, but not enough range for drawing and sketching.
Different pencils are available in different ranges of hardness. Many ordinary pencils are only available in HB, whilst some specialist art pencils are available in every possible hardness grade.