I wish I found this site earlier, really cool stuff!
Sorry for joining in so late and not helping the conversation, I was pretty busy.
Here is my entry, done with Blender:
I made a small change in geometry: I added an edge loop in the center of the welding seam to get a better UV seam and remapped it, I hope that is not too intrusive of a change. It is not crucial to my setup, but I thought I would need it at first. Here is a screenshot:
I went for an approach very similar to @MikkoLahti. Instead of curves I am using UV mapped geo rings for both proximity (dynamic paint) and secondary UV coords (data transfer).
For varying scratchiness/roughness I used vertex colors. I used no additional bitmaps, the scratches and all are procedural.
My shader tree itself is a bit of a mess because I tried different methods and cleaning up in the end fell a bit short. The grey panel is only for making circular shapes along the seams.
Here is the file as well (Blender 2.8):
I probably won't have time the next few days to take it all the way, but it was a lot of fun to play around with different methods, great challenge!