UPDATE 3-Australia probes claim China dumping aluminium

* Australia investigates China aluminium dumping claims * Probe covers extruded products over one-year period * China warns it will defend its rights under WTO SYDNEY, June 24 (Reuters) - Australian customs authorities on Wednesday launched an investigation into whether China is dumping aluminium products at unfair prices in the Australian market, the latest in a series of complaints by China's trading partners. The complaints surface as Chinese exports of raw materials and semi-finished goods face less receptive buyers in countries hard hit by the financial downturn. A source close to the investigation said China was stepping up imports to Australia after being found in violation of dumping laws in Canada. Canada slapped China with dumping and subsidising tariffs after finding in March that extrusions from China injured domestic producers. The spokesman for China's Ministry of Commerce expressed "regret" over Australia's three anti-dumping and anti-subsidy investigations into Chinese products over the last year, in a statement posted on the ministry's website (www.mofcom.gov.cn). "We hope that Australia uses caution, strictly applies WTO rules and investigates this case in a fair, just and transparent manner," spokesman Yao Jian said. "If Australia in any way violates WTO rules, China reserves its rights to resort to WTO dispute resolution." Chinese imports of extruded products to Australia ballooned more than 13,000 tonnes in the first quarter compared with around 22,000 tonnes to the bigger U.S. market, said the source. Australia's investigation followed a complaint by local extruded products maker Capral Ltd (CAA.AX) that Chinese imports were subsidised by Beijing and damage the Australian market. Chinese importers and Capral each account for about a third of the 155,000 tonnes of extruded aluminium goods consumed annually in Australia, a Capral spokesman said. "We want to operate on a level playing field, which is not the case at this time," the spokesman said. FREE-TRADE ACCORD Yao noted the Australian government recognised China, its second-largest trading partner, as a market economy in 2005 and has since conducted negotiations for a free-trade accord. Chinese and Australian relations were strained after Melbourne-based Rio Tinto Ltd/Plc (RIO.AX), the world's largest aluminium maker, this month pulled out of a $1.5 billion tie-up with Aluminum Corp of China, or Chinalco, in favour of a partnership with fellow Australian BHP Billiton Ltd/PLc BHP.X(BLT.L). Australian Customs issued a notice detailing the investigation, saying it is alleged that China dumped aluminium extrusions in Australia from July 1, 2008 to June 30, 2009. Products that are extruded are largely made of aluminium and used in construction materials, such as window frames and siding. Many primary aluminium producers have dropped out of extrusion making but remain suppliers of metal to the sector. Australia's investigation comes a day after India imposed a 14 percent duty on Chinese imports of aluminium flat products. [ID:nBOM465706 Also, the United States and European Union took action against China on Tuesday for restricting exports of certain industrial raw materials, which they say unfairly reduces costs for Chinese industry. [ID:nN23114] China has rejected the charges, saying the practices were in keeping with World Trade organisation regulations. The investigation in Australia also comes shortly after (Additional reporting by Lucy Hornby; Editing by Clarence Fenandez and Sue Thomas)