Clay Dust element is a replacement for Concrete's mixing function that got removed, basically. The particles adhere to one another pretty tightly unless heated, where it becomes essentially a normal dust. If cooled, the particles cohesion increases drastically, and the particles can become suspended in mid-air. ...If there are other particles to adhere to, at least.

This means it's both a solid -and- a powder! :D You can melt blocks of it with fire or etc, and they smoosh and melt. n_n It also turns to lava eventually though when heated.