Alcoa welcomes union pay freeze offer

Alcoa has welcomed an offer by workers at its Portland smelter to agree to a one-year pay freeze as the company battles difficult market conditions.

The Australian Workers' Union has offered to forgo a pay rise in upcoming negotiations and restrict a new enterprise agreement to one year - rather than the traditional three - to allow time for conditions to stabilise.

The pay freeze would save the company upwards of $1.5 million, the union says.

Portland smelter manager Peter Chellis on Thursday commended the AWU's "responsible approach" to the EBA negotiations.

"It demonstrates that all parties remain focused on the smelter's viability in tough market conditions in order to help protect the approximately 2000 direct and indirect jobs associated with the smelter," he told AAP.

Alcoa is in discussions with the Victorian government about the pressures it is facing but has previously refused to say if it is seeking financial help.