Just make it so that to "recycle" you have to buy a new one.We need state laws that every new catalytic converter has a very visible serial number on the bottom and cannot be legally sold or installed if that number is missing or altered. If yours get stolen, you can report the serial number and a cat with that number could not be legally sold or installed. Anyone intentionally selling or installing missing, altered, or stolen serial numbers gets booked. Stolen cat serial numbers could also be checked for during routine state vehicle inspections.
This is not perfect, but it would probably severely disrupt the black market for stolen cats and significantly reduce the huge problem that it is today.
again though make all the laws you want, the criminals don't care. The real way is follow the money, whoever is buying them and funding the people stealing them are who you need to go after. Go up the chain to who ever is buying or selling the recycled material, the smelters or whoever. Cut them off.