N1 is the material used to produce N2. In general, the material is marked by で when there is a visible trace of the material in the product, and から is used when the material is transformed in the process of making the product, and there is no visible trace of the material found in the product.
鉄で刀を作ります。
A sword is made of iron.
牛乳からバターを作ります。
Butter is made from milk.
