Detection of early stage corrosion on slender steel members is crucial for preventing buckling failures of steel structures. An active photoacoustic fiber optic sensors (FOS) system has been reported for early stage steel corrosion detection of steel plates and rebars using surface ultrasonic waves. The objective of this paper is to investigate the surface corrosion/rust detection problem on steel rods using numerically simulated surface ultrasonic waves. The finite element method (FEM) is applied in simulating the propagation of ultrasonic waves on steel rod models. Transmission mode of damage detection is adopted, in which one source (transmitter) and one sensor (receiver) are considered. In this research, radial displacements at the receiver were simulated and analyzed by short-time Fourier transform (STFT) for detecting, locating, and quantifying a surface rust located between the transmitter and the receiver. From our time domain and frequency domain analyses, it is found that the presence, location, and dimensions (length, width, and depth) of surface rust can be estimated by ultrasonic waves propagating through the surface rust.