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The main reason for the downgrade is the deteriorating conditions in international markets for the red metal.
The agency also announced its copper price forecast for 2016 was US$2.80/lb.
The drop in oil prices, the appreciation of the US dollar in international markets, as well as the gradual slowdown of the Chinese economy, were the factors that Cochilco took into account to adjust its copper price forecast for the year, mining ministerAurora Williams said in a release.
In addition, an increase in the global offer of the red metal, as well the risk aversion of investors toward commodities, has driven prices further down, Williams said.
The average price of copper in 2014 was US$3.113/lb, in line with Cochilco's forecast for the year of US$3.12/lb.
Cochilco said that global copper consumption this year is expected to rise 2.6% to 22.5Mt, while Chinese demand is forecast to grow 4%. China accounts for over 45% of global copper consumption.
Cochilco is predicting a market surplus of 275,000t for this year, while the 2016 surplus is expected to hit 404,000t. The agency's previous surplus forecast was 429,000t and 505,000t in 2015 and 2016, respectively.
In terms of copper production, Cochilco said it expects global output to reach 19.6Mt in 2015, up 6.3%, which represents an additional 1.17Mt coming mainly from operations in Zambia, Indonesia and Mexico.
Production in 2016 is expected to be 20.9Mt, up 6.4% from forecast 2015 levels.
Cochilco forecasts copper production in Chile to reach 6Mt this year, below its September 2014 estimate of 6.23Mt. Production for 2016 is expected to reach 6.24Mt, up 4%.
Chile is the world's largest copper producer.
Growth in output this year will come from new operations that came online in 2014 as they enter into planned production, including state copper producer Codelco's Ministro Hales, Lumina Copper Chile's Caserones and KGHM International's Sierra Gorda.
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