My nearly three year old nephew adores pencils. He has a box of Caran D'Ache ones he was given by his granny, and he will take them all out of the box one by one and draw with them. If the colour doesn't appear on the paper he is using because the pencil is the same colour as the paper it is "not working"! He then puts all the pencils back into the box and we get the same game all over again. He likes the crayons too, of course, but he does love the box of pencils.