Yes, some monster loot unravels to relics. But you still can craft relics.
- Use a bronze runic hammer or better.
- Use valorite ingots, the metal type gives a bonus but the spread of damage types is irrelevant. Verite ingots might have a chance, untested by me.
- Make Leafblade of Ease, Guardian Axe, or Knight's War Clever. 18 ingots each.
- Use a smith with arms lore to get the 5% damage increase bonus if you can.
- Unravel at the Queen's Soulforge.
- Use a gargoyle to do the unravelling.
The Queen's soulforge gives a big bonus, well worth the effort of killing 340 toxic sliths. Being a gargoyle also gives a bonus but you might have some success as a human, unverified. Typical results will be 20 Knight's War Cleavers unravel to 22 relics.
Imbuing lesser items up to relic level intensity does not work. The intensity of an imbued item is multiplied by 0.80 before the unravel step.