Smell Pencils

When using colored pencils, why such a pungent product? What chemical / substance creates the smell?

For the color to adhere to the paper often time a substance such as wax is used in the pencil to hold the colored powder together. In turn, when disturbed by the action of writing, it releases a chemical substance with a pungent odor, or smell rancid. It is the oxidation of fat in the wax.