User blog comment:FairyRaven/Fairy Tail Chapter 397: Steel, Review and Commentary/@comment-7418318-20140825132453/@comment-25111584-20140826074519

Lead was used in some common paints before pencils, they were commonly used for writing by scribes, etc. Quite a few cases of lead poisoning were found. Graphite wrapped in wood was a substitute, hence got called lead (actually lead mock-up). Not because of the appearance.

Main point was that carbon got used because it was not poisonous in moderate amount (in proportion to body mass, oc).