The propagation behaviour of guided ultrasonic waves in a steel pipe with welded bend is studied by finite element simulation. The effectiveness of the longitudinal L(0,2) and torsional T(0,1) guided waves in detecting circumferential cut near the weld is investigated. In order to identify the presence of the defect, the reflection strength due to the cut is studied. The geometry of the weld is constructed based on common V-bevel butt joints and the anisotropy of the 316L stainless steel weld is included to correctly predict the scattering of ultrasonic waves. The finite element model is built to allow high accuracy. Detection of small circumferential cut (up to 60° circumferential extent) can be achieved with longitudinal L(0,2) mode. Detection of moderate to large circumferential cut can be achieved by torsional T(0,1) or longitudinal L(0,2) modes, with T(0,1) mode preferred due to its less mode conversion to higher order modes.