They are induced currents that are created by a process called electromagnetic induction. When an AC is applied to a conductor, a magnetic field is created around the conductor. If another conductor is nearby this alternating magnetic field, currents will be induced in the second conductor. Induced currents are electrical currents in a circular sense, such as an eddy current. Also called Foucault currents.
It is used in nondestructive testing to detect surface discontinuities, measure material thicknesses, measure coating thicknesses, and conductivity measurements.