Valtteri Bottas ended qualifying in Sochi just 0.095 seconds shy of poleman Sebastian Vettel , conceding to the Scuderia's current speed advantage.
The Finn out-paced team mate Lewis Hamilton again but the effort just wasn't good enough.
"Well I think it's pretty clear to see from the result, Ferrari was quicker today," Bottas said.
"We were close in the end, but not quite enough.
"To be honest, the whole weekend, they've had the upper hand and been able to extract much more especially from the ultra-soft tyre, and that's where we really struggled yesterday."
Bottas believes Mercedes is still a work in progress with improvements possible by tomorrow when the lead contenders line up on the grid.
"We made improvements for today, but obviously not quite enough still," Bottas added.
"Good team effort to get close, we're on the second row. As always, tomorrow is the day that really counts.
"I think a second row start here is not actually that bad a thing. It's a pretty long run into Turn 1."
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