"They are my pencils, but she needs them."
Translation:Son mis lápices, pero ella los necesita.
Sometimes using Ellos, Yo, Tu etc in front is permitted, in this instance my answer was wrong because I put "Ellos son mis lapices, pero ella los necesita". Why would this be incorrect? Are there only certain instances when you put Yo/Tu/Ud/Nos/Uds in front?
él/ella/ellos/ellas aren't used for objects -- they aren't used in the way that we might use "they" in English to mean either people or things. Where objects are concerned, conjugate the verb for number ("son" instead of "es," in this example, because we are speaking about more than one pencil), but don't use a subject pronoun at all.
"Son mis lápices" = They are my pencils.
"Ellos son mis lápices" = A certain group of people are my pencils.