What is it? What can it be used for?

It can be used for crafting (with a weapon).

Speaking of which, I've had incredible difficulty finding it. Never seen it a single time. I'm at L19 by now and have been looking for it for 6-7 levels at least.

I found it once in a chest. i it that good?

No. It adds an unimportant amount of fire damage.

Regards,
Thorsten

How does its damage compare to a Fire Essence?

I have found the spice a few times, it looks like a brown bag of pixie dust usually in chests but also can buy from merchants. It is more expensive than a essence and is pretty rare.

It does more damage than a fire essence at least it did when I used it, and I think it can be used even though another damage add on has already been used, hazy on that.

Have not found any in this or last playthrough, but I found it like 3 times in the playthrough before that! Random loot strikes again!