Lewis Hamilton does not think his Mercedes is the fastest car on the grid at present
Sebastian Vettel finished third on the timing sheets on day one of the second week, crucially ahead of Lewis Hamilton on the same soft tyre.
Both Vettel and team-mate Kimi Raikkonen peppered the top of the leaderboard in the first week too as Ferrari impressed.
The Italian team have not won a title since 2008 but Hamilton, who has triumphed with Mercedes in the last three Constructors' Championships, believes the Maranello have closed the gap.
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"Ferrari are possibly the favourites," Hamilton said.
"We can't take our eyes off them they are doing such a great job.
"And Red Bull look like they're going quite quick today.
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"It is going to be close at the first race for sure."
The F1 circus will head to Melbourne later this month for the Australian Grand Prix on March 26.
And Mercedes will hope to have shaken down the problems they encountered on Monday morning as Hamilton struggled with floor damage and tyre wear in the warmer conditions.
Lewis Hamilton was hindered by floor damage in the morning
"It wasn't feeling great today, but that's just with set-up and it's quite hot today as well so tyres degrading and things like that," Hamilton added.
"And we had some damage to the floor, but I didn't have any offs or anything like that, which is a good thing.
"I did see puffs of smoke from other people going off, but I managed to keep it on.
"Just a bit of an awkward balance today and I think the temperatures are a bit higher today, so it's harder on the tyres.
"I'm not particularly excited at the moment, just because it's the first day of week two and I didn't get a lot of running this morning, so I'm looking to the next couple of days."