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Depends on what you expect to get from doing that. Usually when you use a powdered metal it gets compressed until it becomes solid metal. If you could compress the graphite enough it seems to me you would have solid carbon, i.e, charcoal (because try as you might you won't compress it enough to make a diamond with a 20 ton press). But, if your intent is to add carbon content to the steel you would probably do that in a case hardening kind of way....
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