The world's biggest copper miner Codelco lowered the premium by 26 percent on the price it offers Chinese buyers to keep up with the weakening demand of the mineral.

According to Bloomberg, the Chile-based copper firm's chief executive officer Nelson Pizarro said the company would cut cost than curb output to address the slump in prices that are at a six-year low.

"We're trying to lower costs to overcome the price drop but we're not cutting production," Pizarro said. "We would rather cut costs than production. If we suspend production then it's difficult to restart."

Reuters reported that Codelco will offer premium costs at only $98 per ton in 2016, which is a drastic decrease from $133 in 2015. This is to address the fears of slower consumption as China faces economic slowdown. Codelco's premiums are considered benchmark for global contracts, which means cutting cost would prompt other producers to do the same. Chinese buyers were only expecting premiums to go down to $105 or $110. They were shocked with how low the prices went, which is the biggest slump percentage since the global financial crisis.

The drop in copper is due to investors' expectations of excess global supply and the slow demand from China, which is the world's biggest buyer of the mineral as reported by The Sydney Morning Herald. The December delivery of Copper went down 0.7 percent to $2.1115 a pound, this is the lowest it has been since May 2009.

The drop in copper prices has not yet been arrested by a decrease in production, especially with the 400,000 metric-ton cut by Africa's Glencore Plc. According to Goldman Sachs Group Inc., only a big increase in Chinese consumption can bring the copper prices back up. Executives believe that copper is close to the bottom as predictions on output cuts creates a broad imbalance between the supply and demand of the copper. There aren't many predictions, however, on when the prices for copper could rebound.