I picked this up at an art supply store and have found it well suited for making paint chips, scratches, and areas of worn paint on armor models.

It has a metallic quality similar to graphite sticks, but is very soft. With very light pressure you can rub it over tracks, along hatch edges, or anyplace else you want to show some wear.
The over-grown pencil shape is very hady also. The paper wraper is nice when compared to graphite sticks.
I like it for scratches as by varying the pressure you apply it with, you can create minor or major scratches.
I have found other pencils to be too hard and was always worried about going through my paint job. Plus, you don't need to grind it up like you sometimes have to do with graphite. But, I suppose you could grind it and then brush it on as well.
Steve