Confined etchant layer technique (CELT) is an electro- or photo-chemically induced chemical etching method for micro machining with nanometer resolution. The etching resolution can be significantly improved by the introduction of scavenging reaction, which makes CELT distinguished from conventional chemical etching or electrochemical machining. But, the scavenging reaction makes CELT have a more complicated reaction system than scanning electrochemical microscopy (SECM). In order to reveal the mechanism of CELT and etching resolution related factors, an axisymmetric numerical simulation model is proposed in this paper. Based on this model, the scavenging reaction, the core feature of CELT, is simulated. The simulation results of scavenger concentration’s effect on the cyclic voltammetry curve (CV curve) and etching resolution are qualitatively consistent with the experiment results. It is found that the scavenging reaction and etchant’s concentration distribution are dramatically affected by scavenger’s concentration and the distance between the working electrode and workpiece (working distance, WD).